The European Securities and Markets Authority (ESMA) has extended its recommendations for European market infrastructure regulation (EMIR) equivalence across countries in Asia and North America.
ESMA’s equivalence assessments will be used by the European Commission to establish whether or not to waive some aspect of EMIR in third-country trades, provided those countries have similar regulatory regimes in place.
Its latest advice covers regulatory regimes in Canada, India and South Korea. ESMA also extended its advice on Hong Kong’s OTC trading and trade repository (TR) equivalence, Singaporean TRs, Swiss regulation and Australian OTC and TR rules.
For both South Korea and India, ESMA felt that the country’s rules for central counterparties (CCPs) were broadly equivalent to EMIR, though it noted that not all CCPs met the same level of standards and thus, not all were considered equivalent. Areas of concern for ESMA were around a CCP’s internal policies, procedures, rules, models and methodologies, and it advised the council that any authorised CCP which changed its policies would no longer be equivalent to European rules.
Canada’s regime however, is not equivalent to EMIR, according to ESMA, due to an “absence of legally binding requirements equivalent to the clearing obligation, non-financial counterparties provisions and risk mitigation techniques”.
Hong Kong and Switerland were both considered to not yet be at an advanced enough stage in their regulatory development for ESMA to make an equivalence assessment and it requested the Commission renew its mandate for ESMA to assess these regimes in due course.
TRs registered in Singapore were found to be effectively supervised and ESMA has recommended that the rules are equivalent to EMIR.
In Australia, while some rules were considered equivalent, there is a lack of legally binding requirements for risk mitigation techniques in place and, as such, ESMA found the Australian regime falls short of EMIR in some areas.