Tuesday November 19 2013

News Source: Global Exchanges

Focus: Derivative Market Segment

Type: General




The European Securities and Markets Authority (ESMA) has issued final draft regulatory technical standards (RTS) related to derivative transactions by non-European Union (EU) counterparties. The RTS implement provisions of the Regulation on OTC derivatives, central counterparties and trade repositories (EMIR).

ESMA’s draft RTS clarify that OTC derivative contracts entered into by two counterparties established in one or more non-EU countries, for which a decision on equivalence of the jurisdiction’s regulatory regime has not been adopted, will be subject to EMIR where one of the following conditions are met:

• One of the two non-EU counterparties to the OTC derivative contract is guaranteed by an EU financial for a total gross notional amount of at least €8bn, and for an amount of at least 5% of the OTC derivatives exposures of the EU financial guarantor; or

• The two non-EU counterparties execute their transactions via their EU branches and would qualify as financial counterparty if established in the EU.

ESMA’s draft RTS will cover OTC derivative contracts concluded after the date the RTS becomes applicable.