EMIR: ESMA publishes final report on central clearing for small financial counterparties

ESMA has published its final report on the clearing obligation under the European Market Infrastructure Regulation (EMIR) for financial counterparties with a limited volume of activity.

ESMA has previously drafted regulatory technical standards (RTS) in relation to the clearing obligation under EMIR. There are currently three Commission Delegated Regulations on the clearing obligation based on draft RTS submitted to the EU Commission by ESMA.

Some financial counterparties with a limited volume of activity were facing difficulties in preparing for the clearing obligation. ESMA consulted with affected stakeholders on issues facing counterparties in establishing access to clearing, on the regulatory developments affecting access to clearing, on the relative systemic importance of these counterparties in the OTC derivative market and on a proposal to amend the phase-in period of the clearing obligation.

ESMA's report proposes to amend the Delegated Regulations on the clearing obligation to delay the phase-in for financial counterparties with a limited volume of derivatives activity by two years. The report also proposes aligning the three compliance dates for Category 3 firms regarding interest rate swaps and credit default swaps to 21 June 2019.

The report has been submitted to the Commission for endorsement of the draft RTS. The Commission should decide whether to endorse within three months.