ESMA urges regulatory convergence over CCP supervision

European regulators hope to impose new risk management and supervisory standards for CCPs.

Europe’s financial watchdog has called for enhanced supervisory convergence between national regulators over central counterparties (CCPs).

Following a report from the European Securities and Markets Authority (ESMA) on the risk management procedures of CCPs, it has released a peer review over how national competent authorities (NCAs) oversee clearing houses.

It concluded NCAs across Europe differ in the supervision of CCPs, and identified certain divergences in margin requirements set out by national regulators.

ESMA also reviewed the collateral requirements set out by NCAs, and identified areas where supervisory convergence could be further enhanced, including on-going reviews of CCP collateral policies and on-site inspections.

The pan-European regulatory body identified a number of best practices for NCAs, including “having direct access to supervised CCPs data and requesting the CCPs to verify the marketability of collateral and reliability of prices.”