A vote by the European Parliament's Economic and Monetary Affairs Committee (ECON) on the European market infrastructure regulation (EMIR) has been delayed until 24 May, to cope with discussion of nearly 1000 amendments that have been proposed to the original document by MEPs.
EMIR, drafted in September 2010 by the European Commission (EC), is intended to provide a framework for central clearing and risk mitigation of OTC derivatives. It was also to include requirements for central counterparties (CCPs), post-trade interoperability, reporting obligations and requirements for trade repositories.
ECON had been expected to vote on the proposals from MEPs on 20 April. However following a meeting of ECON last week it was decided to continue the discussion on this date to allow more time to discuss possible amendments.
German MEP Werner Langen, the rapporteur for ECON's paper on EMIR, suggested a number of changes to the original EC proposal. Firstly, he suggested a review of interoperability agreements for CCPs dealing with OTC derivatives would be extended to cover all asset classes. The results of this review, conducted by the European Securities and Markets Authority, would be reported in September 2014, and legislation regarding interoperability arrangements would then be proposed.
Secondly he said that the regulation should only apply to OTC derivatives. This would limit the scope of clearing obligations for CCPs, however MEP Sharon Bowles, chair of ECON, and the current Hungarian presidency of the Council of the European Union have both suggested expanding access to central counterparties (CCPs) to include exchange-traded derivatives.
In total 975 amendments have been made to the original proposal. Other topics of debate include whether or not clearing for OTC derivatives should be introduced retroactively; whether interoperability between CCPs should be permitted; and what exemptions from clearing should be granted.
The next step will be further discussion by ECON on 20 April. Following this, ECON will work on a compromise paper, addressing the amendments. The final vote is expected some four weeks later, with the European Parliament plenary expected in June 2011.