02 April 2012

ICMA ERC submits comments on draft regulatory technical standards on risk mitigation techniques for OTC derivatives not cleared by a CCP

The ICMA European Repo Council's discussion paper seeks stakeholders' views on the regulatory technical standards which the European Supervisory Authorities are required to develop jointly, specifying the requirements on risk mitigation techniques for OTC derivative contracts not cleared by a CCP.

The ERC also notes that whilst the regulatory technical standards (RTSs) considered by this discussion paper are specifically concerned with OTC derivatives, they are nevertheless a part of the European Market Infrastructure Regulation (EMIR), which is itself a framework with broader ramifications. Accordingly, the ERC considers that as the European Supervisory Authorities advance their essential work to elaborate the technical details necessary to operationalise the EMIR legislative framework, it is vital to establish standards which, whilst being robust, retain adequate flexibility to allow calibration suited to the efficient operation of markets in, and specific characteristics of, different, non-derivative, asset classes.

The ERC draws attention to the fact that, through ICMA, it is contributing to the development and work of the Collateral Initiatives Coordination Forum (CICF), a joint trade associations’ body established at the beginning of 2012. Bringing together a broad range of representation from right across the financial industry, the CICF provides a new and helpful channel for information sharing, education and joint industry endeavours in the field of collateral.

Full discussion paper

© ICMA