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28/05/2019 ESMA71-99-1159 ESMA consults on tiering comparable compliance and fees under EMIR 2.2 , Press Release PDF
89.98 KB
09/10/2017 ESMA71-99-613 ESMA highlights importance of LEI for MiFIDII/MiFIR compliance , Press Release PDF
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The European Securities and Markets Authority (ESMA) has published a Briefing on the Legal Entity Identifier (LEI) as part of its efforts to raise industry awareness and facilitate compliance with the LEI requirements under MiFID II ahead of its 3 January 2018 launch.

ESMA expects market participants to take all necessary steps to ensure full compliance with the LEI requirements under MiFID II. Based on its previous experience with EMIR reporting, ESMA urges reporting entities not to delay in addressing this important matter, as advance preparation will help in avoiding backlogs and ensuring that all market participants are ready for the new regime.

10/07/2017 ESMA70-151-370 Final report on draft technical standards on data to be made publicly available by TRs under Article 81 of EMIR Final Report PDF
322.56 KB
21/04/2017 ESMA70-151-223 Final Report on technical advice to EC on fees to TRs under SFTR and on certain amendments to fees to TRs under EMIR Final Report PDF
336.87 KB
30/09/2016 2016/1411 ESMA consults on future reporting rules for securities financing transactions , , Press Release PDF
148.11 KB

The European Securities and Markets Authority (ESMA) has issued today a consultation paper on draft technical standards implementing the Securities Financing Transaction Regulation (SFTR), which aims to increase the transparency of shadow banking activities. Securities financing transactions (SFTs) are transactions where securities are used to borrow cash (or other higher investment-grade securities), or vice versa – this includes repurchase transactions, securities lending and sell/buy-back transactions.

26/05/2016 2016/725 Draft RTS on indirect clearing arrangements under EMIR and MiFIR , , Final Report PDF
740.71 KB
05/04/2016 2016/422 Final Report RTS on access aggregation and comparison of TR data under Art.81 of EMIR Final Report PDF
365.72 KB
05/04/2016 2016/429 Review of Article 26 of RTS No 153/2013 with respect to MPOR for client accounts Final Report PDF
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Reasons for publication
This final report proposes amending Article 26 of the Commission Delegated Regulation No 153/2013 with regard to regulatory technical standards (RTS) on requirements for central counterparties (CCP) on the time horizons for the liquidation period which European Securities and Markets Authority (ESMA) has drafted under the Regulation (EU) No 648/2012 of the European Parliament and Council on Over-The-Counter (OTC) derivatives, central counterparties and trade repositories (EMIR).

In relation to the draft amended technical standards, ESMA consulted stakeholders on two occasions: the first consultation on a Discussion Paper (DP) was conducted from 27 August to 30 September 2015; the second, on the consultation paper (CP) including the proposed draft RTS was carried out from 14 December 2015 to 1st February 2016.

ESMA received a strong support from the respondents to the CP on the proposed amendment introducing the possibility for EU CCPs to margin on a one day gross basis for clients’ accounts. The responses to the consultation confirm that a one day gross account structure provides a sufficient level of protection to the CCPs and to the clients.

On the proposed conditions linked to this type of account, the majority of the respondents are of the view that they are needed to ensure the safety of the CCPs. Some clarifications or slight amendments have been introduced following the comments received, in particular on intraday margins calls and on entities belonging to the same group as clearing members.

Contents
This paper provides explanations on the draft regulatory technical standards amending the Commission Delegated Regulation No 153/2013 with regard to RTS on requirements for CCP. This report explains the rationale and the scope of the review of Article 26 of RTS No 153/2013 carried out by ESMA. It summarizes the answers received following the publication of the consultation paper and it provides the explanations on whether and how the concerns expressed by stakeholders have been reflected in the final draft RTS.
Annexed to this final report are the legislative mandates related to the draft RTS (Annex I), the ESMA cost-benefit-analysis (Annex II) and the draft RTS (Annex III).

Next Steps
Following the submission of the amended draft RTS to the European Commission, it has three months to decide whether to endorse ESMA’s draft RTS.

31/03/2016 2016/468 ESMA fines DTCC Derivatives Repository Limited €64,000 for data access failures , Press Release PDF
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ESMA fines DTCC Derivatives Repository Limited €64,000 for data access failures

The European Securities and Markets Authority (ESMA) has fined the trade repository DTCC Derivatives Repository Limited (DDRL) €64,000, and issued a public notice, for negligently failing to put in place systems capable of providing regulators with direct and immediate access to derivatives trading data. This is a key requirement under the European Markets and Infrastructure Regulation (EMIR) in order to improve transparency and facilitate the monitoring of systemic risks in derivatives markets.

This is the first time ESMA has taken enforcement action against a trade repository registered in the European Union (EU). DDRL is the largest EU registered trade repository.

ESMA found that DDRL failed to provide direct and immediate access to derivatives data from 21 March 2014 to 15 December 2014, a period of about nine months in which access delays increased from two days to 62 days after reporting and affected 2.6 billion reports. This was due to its negligence in:

  • failing to put in place data processing systems that were capable of providing regulators with direct and immediate access to reported data;
  • failing, once they became aware, to inform ESMA in a timely manner of the delays that were occurring; and
  • taking three months to establish an effective remedial action plan even while delays were worsening.

DDRL’s failures caused delays to regulators accessing data, revealed systemic weaknesses in its organisation particularly its procedures, management systems or internal controls and negatively impacted the quality of the data it maintained.

13/11/2015 2015/1645 Final report EMIR Article 9 RTS ITS Final Report PDF
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13/08/2015 2015/1260 ESMA recommends changes to EMIR framework , Press Release PDF
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The European Securities and Markets Authority (ESMA) has published four reports focused on how the European Markets Infrastructure Regulation (EMIR) framework has been functioning and providing input and recommendations to the European Commission’s (EC) EMIR Review. Three of the reports are required under Article 85 of EMIR, and cover non-financial counterparties (NFCs), pro-cyclicality and the segregation and portability for CCPs. The fourth report responds to the EC’s Review including recommendations on amending EMIR in relation to the clearing obligation, the recognition of third country CCPs and the supervision and enforcement procedures for trade repositories. Steven Maijoor, ESMA Chair, said: “EMIR is a key component of the EU’s regulatory reform package in response to the financial crisis affecting many elements of OTC derivatives markets. While its implementation is still underway we recommend a number of changes, based on our experiences, to improve and streamline the regulatory and supervisory framework and to ensure that the objectives of stability and investor protection are met.” ESMA’s Response to European Commission EMIR Review This report provides input to the EC’s consultation on the EMIR review with recommendations to amend the EMIR framework in a number of areas including: • Clearing obligation - in order to strengthen the EMIR framework and to better respond to changing market conditions, ESMA proposes amending EMIR in order to streamline the process for determining clearing obligations and to introduce tools allowing the suspension of the clearing obligation when certain market conditions arise. It also proposes removing the frontloading requirement; • Recognition of third country CCPs - regarding the recognition of third-country CCPs, ESMA is proposing to rethink the entire equivalence and recognition process to increase its efficiency and effectiveness and to better respond to regulatory differences between third countries. ESMA proposes that the jurisdiction decision be governed by Regulatory Technical Standards (RTS) and that any recognition process should also include additional risk-based considerations allowing it to deny or suspend the recognition of a third country CCP; and • Trade Repositories (TRs) – in order to improve the supervision of TRs, the report makes proposals for changes to ESMA’s supervisory and enforcement powers and procedures including increases in fine levels, broadening the enforcement decisions available to ESMA, appropriate timeframes to consider applications in the registration process and clarifying TRs’ obligations in relation to data quality and reconciliation and supervisory reporting. ESMA’s Reports under Article 85 of EMIR • Non-Financial counterparties (Report No.1) ESMA recommends removing the hedging criteria from EMIR and to use other measures to determine the systemic relevance of NFCs, as this would allow regulators to identify the few NFCs with the highest systemic importance while greatly simplifying the process and reduce the compliance costs for the majority of small and medium NFCs, which pose limited risks to the system overall. • Limiting Pro-cyclicality (Report No.2) ESMA recommends further specifying the rules for implementing the counter-cyclical tools adopted by CCPs for margins and collateral, including regular testing and transparency on the results to further improve their effectiveness. • Segregation and Portability (Report No.3) ESMA has identified some differences in CCP practices in the implementation of the relevant provisions. In order to promote convergent practices and achieve a level playing field, it recommends introducing clarifications and more detailed requirements by RTS along with incentives related to margin period of risk depending on the safety of the chosen account structure. ESMA also proposes monitoring the take-up of the different types of account models to confirm adequacy and efficiency.

13/08/2015 2015/1251 EMIR Review Report no.1- Review on the use of OTC derivatives by non-financial counterparties Final Report PDF
3.03 MB
13/08/2015 2015/1252 EMIR Review Report no.2- Review on the efficiency of margining requirements to limit procyclicality Final Report PDF
3.93 MB
13/08/2015 2015/1253 EMIR Review Report no.3- Review on the segregation and portability requirements Final Report PDF
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13/08/2015 2015/1254 EMIR Review Report no.4- ESMA input as part of the Commission consultation on the EMIR Review Final Report PDF
399.85 KB
22/05/2015 2015/884 Press Release- ESMA calls for modification of UCITS Directive , Press Release PDF
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05/05/2015 JC/2015/02 ESAs- main risks to EU financial market stability have intensified , , Press Release PDF
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The Joint Committee of the European Supervisory Authorities (ESAs) published its fifth Report on Risks and Vulnerabilities in the EU Financial System. Overall, the report found that in the past six months, risks affecting the EU financial system have not changed in substance, but have further intensified. The EU’s economic performance improved slightly in early 2015, however the financial sector in general continues to be affected by a combination of factors such as low investment demand, economic uncertainty in the Eurozone and its neighbouring countries, a global economic slow-down and a low-interest rate environment. The main risks affecting the financial system remain broadly unchanged from those identified in the report’s previous edition, but have become more entrenched. The major risks include: • Low growth, low inflation, volatile asset prices and their consequences for financial entities; • Search for yield behaviour exacerbated by potential rebounds; • Deterioration in the conduct of business; and • Increased concern about IT risks and cyber-attacks. Despite these risks, a number of ongoing policy and regulatory initiatives are contributing to improving the stability and confidence in the financial system as well as facilitating additional funding channels to the real economy. These include ongoing regulatory reforms in the securities, banking and insurance sectors such as the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR), the work on the implementation of the Capital Requirements Directive and Regulation (CRDIV/CRR), the work on the Bank Recovery and Resolution Directive (BRRD), the Deposit-Guarantee Schemes Directive (DGS) and the Solvency II Directive, as well as the European Commission’s plan for a Capital Markets Union (CMU). Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA) and the current Chairman of the Joint Committee, said: “The Joint Committee has noted some improvement in overall market conditions; however, the recovery is not yet sustained and is exposed to risks related to broad macroeconomic conditions, in particular the low interest environment and resulting search-for-yield behaviour. Additionally regulators continue to have concerns about the operational risks generated by some financial institutions’ inappropriate business conduct, as well as those risks posed by inadequate management of IT risks. “However, recent regulatory initiatives across the banking, insurance and securities sectors, such as the Comprehensive Assessment, the insurance sector stress test and Solvency II along with, the ongoing MiFID, EMIR and PRIPS reforms are contributing to improving the stability and confidence in the EU financial system." Key Risks Identified The identified risks in the Report can be divided into macro risks to the EU financial system and economy and operational risks. Macro Risks The key macro risks identified relate to: 1. Risks from weak economic growth and low inflation environment, which include: • Adverse effect that low interest rates and uncertainties about the economic recovery have had on the outlook for the financial industry; • Higher valuation and market liquidity risk has raised concerns about the outlook for financial entities’ stability in the event of reversals in interest rates and asset prices; 2. Low profitability is motivating financial institutions and other investors to search for yield, which requires increased supervisory attention to the viability of business models, related restructuring activity and adequate management of risks. However, the promotion of sound and innovative business models for market-based funding structures could help to deliver additional stimulus; and 3. Some continued doubts on the comparability and consistency of banks’ calculations of risk weighted assets. Operational Risks The key operational risks relate to: 4. Business conduct risk remains a key concern with the Report recommending that supervisors should include misconduct costs in future stress tests where appropriate, while financial institutions should strengthening product oversight and governance frameworks. Further improvements in the regulatory framework and supervisory practices to address conduct risks are also warranted. In addition, further progress needs to be made on benchmark reforms where continuity and integrity remain a source of concern even if key panels remained stable; and 5. IT operational risk and cyber risk remain of great concern and pose challenges to the the safety and integrity of financial institutions. IT risk increased due to costs pressures, outsourcing, the need for additional capacities and a mounting number of cyber-attacks. The adequate integration of IT risk into overall risk management is a key policy for mitigation.
01/04/2015 2015/674 Press release- ESMA launches centralised data projects for MiFIR and EMIR , Press Release PDF
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08/01/2015 2015/20 ESMA review of CCP colleges under EMIR Final Report PDF
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01/10/2014 2014/1209 Press release- ESMA defines products, counterparties and starting dates for the clearing of interest rate swaps , Press Release PDF
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The European Securities and Markets Authority (ESMA) has today issued final draft regulatory technical standards (RTS) for the central clearing of Interest Rate Swaps (IRS) which it is required to develop under the European Markets Infrastructure Regulation (EMIR). The RTS define those types of IRS contracts which will have to be centrally cleared, the types of counterparties covered by the obligation and the dates by which central clearing of IRS will become mandatory for them.