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
“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’.”