The European Securities and Market Authority (ESMA) has published its advice to the European Commission on the equivalence of the regulatory regimes for
OTC derivatives clearing, central counterparties (CCPs), and trade repositories
(TR) of non-EU countries with the European Markets Infrastructure Regulation (EMIR).
ESMA has assessed the equivalence of the regulatory regimes of Australia, Hong
Kong, Japan, Singapore, Switzerland and the US. The third-country rules were compared
with EMIR requirements for central clearing, reporting, CCPs, TRs and non-financial
counterparties as well as risk mitigation techniques for uncleared trades.
ESMA proposes conditional equivalence
ESMA considers third-country regimes equivalent where the legal provisions and
the level of supervision and enforcement is similar to that of EMIR. ESMA finds
the regulatory regimes of Australia and Switzerland for CCPs equivalent to EU
rules. Conditional equivalence is proposed to the following regimes:
-
Hong Kong, Japan, Singapore, and the US for CCPs;
-
the US and Japan for central clearing, requirements for non-financial counterparties
and risk mitigation techniques for uncleared trades; and
-
the US for TRs.
The European Commission is expected to use ESMA’s technical advice to prepare
possible equivalence decisions. Where it adopts such a decision, certain provisions
of EMIR may be disapplied in favour of equivalent third-country rules and, depending
on the specific area determined to be equivalent, ESMA may:
ESMA’s advice is based on a factual assessment of the rules of each jurisdiction
but has also taken into account possible consequences for the stability and protection
of EU entities and investors that an equivalence decision would have. ESMA’s advice
has also considered upcoming regulations in several jurisdictions that may impact
the equivalence assessment.
Next steps
For Australia, Canada, Hong Kong, India, Singapore, South Korea and Switzerland,
ESMA will be delivering its advice on areas not yet covered by 1 October 2013.
CCPs from third-countries that want to continue to be offering clearing services
directly to EU clearing members will have to apply for ESMA recognition by 15
September 2013.