02/10/2013

The European Securities and Market Authority (ESMA) has published its second set of 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).

Following a first set of advice published on 9 September 2013, ESMA has now published its equivalence assessments of the regulatory regimes of Canada, India and South Korea and supplements to its equivalence assessments for Australia, Hong Kong, Singapore and Switzerland.

The third-country rules were compared with EMIR requirements for CCPs, TRs and/or central clearing, reporting, 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. Besides Hong Kong and Switzerland, conditional equivalence is proposed to the other third-country regimes.

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:

  • recognise within the EU a CCP which is authorised outside the EU; or
  • recognise within the EU a TR which is authorised outside the EU;

The different pieces of advice are available on ESMA’s website.