Different regulatory frameworks are already in place to implement the objectives imposed by G-20. EMIR sets in place those requirements at European level. In application of EMIR, regulated funds and asset managers have already put in place legal and operational architectures required to meet EMIR requirements. EFAMA fears Standard 4 could impose additional or different restrictions on the regulated funds to agree and exchange the valuation methodology (e.g. through different definitions of the recovery rate ratios of credit derivatives).
The cost related to the implementation of these developments is high. Being imposed new and similar but not identical criteria would increase the costs that would have to be transferred at least partly on the investors. Additionally, a difference between the regimes would create legal risks and legal costs considering the number of contracts that would have to be modified.
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