The European Securities and Markets Authority (ESMA), the region’s securities watchdog, will extend its deadline for writing the technical standards for the European market infrastructure regulation (EMIR) until 30 September, according sources close to the matter.
ESMA’s initial deadline for writing the EMIR technical standards – known as level two rules – was 30 June, but continued delays to the finalisation of the high level text have reduced the time the European authority has to complete its work. The European Parliament and the Council of the European Union agreed on a final text for EMIR on 9 February.
EMIR is Europe’s response to the Group of 20’s commitment to increase transparency in the OTC derivatives market by standardising instruments so they can be traded on exchange, centrally cleared and reported to data repositories.
ESMA’s level two rules will include details on which types of OTC derivatives will fall under the new rules, the type of collateral that can be used by market participants against their exposure, and extraterritorial issues. Its first market consultation on the rules is expected before the end of this month.
At the end of January, a number of trade associations including 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, sent a joint letter to the European Parliament and Commission expressing their concern that ESMA’s 30 June deadline for EMIR rules was insufficient.