EUROPEAN UNION: ESMA Opens Consultation on CCP Anti-Procyclicality Provisions

Monday January 8 2018

On 8^th January 2018, the European Securities and Markets Authority (ESMA) launched a public consultation on draft guidelines which clarifies the implementation of anti-procyclicality provisions for central counterparties (CCPs) under the European Markets Infrastructure Regulation (EMIR).

EMIR requires CCPs to monitor procyclical effects of margins and to make disclosures on their risk management practices including the models they use to calculate these margins. CCPs also need to implement anti-procyclicality margin measures under EMIR.

These guidelines are addressed to national competent authorities that supervise CCPs authorised under EMIR. The guidelines focus on:

• the monitoring of margin procyclicality;
• the implementation of anti-procyclicality margin measures; and
• the disclosures to facilitate margin predictability.

The draft guidelines address the observations made in the EMIR Review Report No. 2 on the efficiency of margin requirements to limit procyclicality and the 2016 Peer Review on the Supervisory activities on CCP’s Margin and Collateral requirements.

ESMA seeks stakeholders’ feedback by the 28^th  February 2018. It will use this feedback  to finalise the guidelines by the first half of 2018.

For additional information please click the link above.