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EU finally confirms intent to IM mitigate

In the Regulatory equivalent of a pair of socks- necessary, entirely expected, but still welcome; the ESAs have today delivered an early Christmas present to Heads of Compliance in a draft Revised RTS echoing the July 2019 BCBS/IOSCO IM mitigation. Initial Margin          A revised article 36(1) instantiates the BCBS/IOSCO recommended bifurcation into two remaining IM […]

Brexit – contractual dis-continuity

A question that has been ignored, until very recently, is how firms will deal with cross-border derivative contracts when the UK leaves the EU in March 2019. Leaving the single market without either EEA membership or a trade agreement covering financial services will result in complications for existing derivative contracts. With approximately £26 trillion of […]

BRRD 2 “improvements”

Risk magazine reports that the Bulgarian Presidency of the Council of the EU[1] has suggested a reduction in the proposed “BRRD 2” pre-resolution stay period to two days, along with a recommendation that derivatives be included within the power’s scope. The Commission’s November 2017 proposal called for a pre-resolution power of moratorium, enabling national authorities to […]


The transatlantic trading platform cousins have officially been recognised as twins, on 5 November the European Commission announced its long-promised equivalence decision in respect of U.S. swap execution facilities. The CFTC plans to reciprocate by exempting MTFs and OTFs from U.S. registration requirements. The mutual recognition comes just in time before the 3 January 2018 […]

EU Banks- Too Big to fails, Too Big to Save- now Too Big To Separate

The European Commission has quietly buried its TBTF ringfence proposal. At least to the financial community, the contents of Tuesday’s publication of the Commission Work Programme for 2018 were more notable for what they omitted. Under the aspirational subtitle “A Deeper and Fairer Economic and Monetary Union”, Annex III of the Programme contains nine financial […]

Non-cleared margin rules- EC finger officially removed

As expected the European Commission has today adopted the EMIR non-cleared margin RTS. The adoption is in the form of a Delegated Regulation which will be subject to an objection period by the Parliament and the Council. While both bodies are entirely capable of lodging late-stage objections, as evidenced by the recent PRIIPS paralysis, such […]

EU non-cleared fog begins to clear

On 28 July 2016 the EC published a letter to the Joint Committee of the European Supervisory Authorities (ESAs), stating that it will endorse a revised text [1] of the RTS on risk mitigation techniques for non-cleared OTC derivatives Article 11(15) of EMIR. The market has been on tenterhooks since 9 June 2016 when the Commission announced that it would […]

EU unilaterally delays first wave of margin

Hat tip to Bloomberg and the Wall Street Journal for revealing the EU`s intention to unilaterally delay the September deadline for margin requirements. Presented as “procedural” by the European Commission, the delay would be more accurately described as “extremely material” as it will disrupt the internationally-agreed timeline set in the BCBS-IOSCO framework for margin requirements […]

CCP equivalence- US says “I do” too

Following the CFTC-EU Common Approach and the EC’s recognition of US equivalency; the CFTC yesterday unanimously approved a positive “comparability determination”, allowing DCO/CCPs subject to EMIR to benefit from substituted compliance with its clearing regulations. EU-authorised, and hence EMIR-compliant, CCPs will now be effectively absolved from CFTC requirements for financial resources, risk management, settlement procedures […]

MiFID 2 delay official

To the surprise of no-one, the European Commission has today proposed a one year extension to the application date of MiFID 2. The new deadline is 3 January 2018. Commissioner Jonathan Hill said, “Given the complexity of the technical challenges highlighted by ESMA, it makes sense to extend the deadline for MiFID II. We will […]

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