Sharon Bowles MEP has survived a mid-term vote on her position as chair of the European Parliament’s Economic and Monetary Affairs Committee (ECON), reducing the scope for further delays to key derivatives legislation.
Bowles’ re-election is also a positive sign for the UK, which was considered in danger of losing its political influence in Europe following the decision in Q4 2011 by prime minister David Cameron to veto a new EU-wide treaty designed to restore confidence in the euro.
Bowles, who is responsible for chairing the trialogue process on the European market infrastructure regulation (EMIR), faced a routine vote among MEPs having reached the halfway point in her five-year tenure as ECON chair. Any decision to replace Bowles – whose Liberal Democrat party is in coalition with Cameron’s ruling Conservatives – would have been immediate.
EMIR is the European response to the Group of 20’s demands to standardise OTC derivatives where possible so that they can be traded on exchange and centrally cleared. The trialogue process attempts to reconcile differences between the texts drafted by European Parliament and Council of the European Union.
A lack of agreement on certain issues, including the role that securities watchdog the European Securities and Markets Authority (ESMA) would play in authorising and supervising central counterparties, has slowed progress. A trialogue meeting scheduled for today, largely believed to be the last before ESMA can start writing the level two technical standards for the new rules, has been postponed to an as-yet unspecified date.
The implications of the EMIR delays were highlighted by a number of industry bodies in a letter sent to European authorities last week.
The associations – which included the Alternative Investment Management Association, the European Banking Federation, the Futures and Options Association, the Association for Financial Markets in Europe, the European Association of CCP Clearing Houses, the International Capital Market Association and the International Swaps and Derivatives Association – were concerned that continued hold-ups to the finalisation of the level one text would leave insufficient time to draft the accompanying technical standards.
ESMA is required to finalise technical standards by 30 June 2012, but industry participants have warned that even an extension to 30 September would not leave sufficient time for this to be completed.