Tuesday, January 24, 2012 11:57:14 AM

Barnier promises EMIR breakthrough by Easter

Much delayed derivatives regulation could be finalised by Easter as the European Commission (EC) has agreed to enter final negotiations next week over the European market infrastructure regulation (EMIR).

Internal market and services commissioner Michel Barnier revealed earlier today that the EC had agreed to move EMIR a step forward to trialogue discussions next week, paving the way for final agreement on the text by the first week of April.

“It is important to me to have all member states on board, and I include here the United Kingdom because London is by far the biggest trading place in Europe for derivatives, with more than two-thirds of all transactions,” said Barnier.

Lack of agreement on some issues, including the role securities watchdog the European Securities and Markets Authority (ESMA) would play in authorising and supervising central counterparties (CCPs), has slowed progress on the new regulation.

EMIR is Europe’s response to Group of 20 (G20) demands to standardise OTC derivatives where possible, so they can be traded on exchange and centrally cleared. The move now better places Europe to fulfil its G20 derivatives clearing commitments by the Q4, 2012 deadline. The trialogue meeting had originally been scheduled for yesterday but was postponed.

During trialogue, differences between the texts drafted by European Parliament and Council of the European Union are reconciled. The process is needed before ESMA can start writing technical standards for the new rules.

“It is essential that CCPs are well regulated and supervised,” said Barnier. “They must not become the next financial institutions to become ‘too big to fail’.”

Bruce Love +44 (0)20 7397 3818