CESR has decided to provide its general policy view on the areas included in the Consultation. Derivatives markets should be appropriately coordinated with the measures taken or planned in other important financial markets, in particular, in the U.S.
CESR welcomes the Communication from the Commission on ensuring efficient, safe and sound derivatives markets, the accompanying Commission Staff Working Paper and the related Consultation Document on possible initiatives to enhance the resilience of OTC Derivatives Markets.
Instead of responding to all the detailed questions presented in the Commission Consultation Document, CESR has decided to provide its general policy view on the areas included in the Consultation. The areas discussed are as follows:
· Use of central data repositories. Trade repositories should aim to foster the efficiency, stability and orderly functioning (i.e. avoidance of abusive behaviour) of financial markets.
· Safety and soundness of CCPs. CESR strongly supports the recent successful implementation of the Commission’s initiative to promote industry efforts for CCP clearing of credit default swap (CDS) contracts and the intention of the Commission to closely monitor further progress in this area. CESR stands ready to contribute to the Commission’s continued efforts in this area.
· Transparency of trading. In CESR’s opinion an increased level of transparency would be beneficial to the market and a harmonised approach to post-trade transparency would be preferable to national initiatives taken in this area on the basis of the flexibility allowed by MiFID.
· Transaction reporting of OTC derivatives. CESR has decided that, at this stage, transaction reports should be exchanged on those OTC derivatives whose underlying instrument is admitted to trade on a regulated market (as for TREM, this excludes non-securities derivatives such as commodities, FX and interest rate derivatives).
· Position reporting to competent authorities. Whilst CESR has not conducted specific work on position reporting, it sees merit in considering this option on the basis of a more elaborate proposal and a relevant cost-benefit analysis, taking into account the relevant regimes for transaction reporting and the initiatives to develop data repositories.
· Need for global cooperation. Finally, due to the global nature of financial markets, it is, in CESR’s view, very important that the measures taken in the EU in relation to the regulation of OTC derivatives markets are appropriately coordinated with the measures taken or planned in other important financial markets, in particular, in the U.S.
© CESR - Committee of European Securities Regulators
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