Nasdaq OMX Clearing has become the first clearing house to receive approval from European regulators under the European market infrastructure regulation (EMIR).
The news comes after Eurex’s application was turned down by the College of Regulators last week.
Approval of Nasdaq OMX’s application triggers a countdown to mandatory clearing of OTC derivatives under EMIR, which will see regulatory standards drawn up by the end of this year.
The Swedish regulator the SFSA approved Nasdaq OMX Clearing’s application to become a central clearer of OTC derivatives following approval from the College of Regulators, the European Securities and Markets Authority (ESMA), the European Central Bank and central banks across the Nordics and in the UK on 12 March.
Hans-Ole Jochumsen, executive vice president, transaction services Nordic, Nasdaq OMX, said: “Our clearing house was the first with true multi-asset derivatives clearing in Europe. Now, as the first to be EMIR authorised, we can focus on further developing our offering, including an expansion within interest rate swaps and German power derivatives, as well as introducing clearing of foreign exchange products.”
ESMA is expected to make notification of the clearing obligation, which will require firms to centrally clear many OTC derivatives contracts, this week and will publish its draft regulatory technical standards detailing exactly which products must be cleared in September 2014.
Once the draft standards have been published they will need to be approved by the European Commission, Parliament and Council. An exact date when firms will need to begin clearing their derivatives contracts is not yet clear but could happen before the end of the year. Market commentators expect a phase-in period for different types of counterparties as seen in the US last year, when it introduced mandatory clearing of OTC derivatives.
Eurex Clearing had hoped to be the first to receive approval after making its application in August last year, but last week it was turned down by the College of Regulators for undisclosed reasons, despite having been approved by German regulator BaFin. Eurex told theTRADEnews.com it plans to continue working with ESMA and the College to become EMIR authorised and continued to operate under its existing national licence.