Rapporteur Langen (EPP, DE) presented the following issues where further debate is needed:
· The scope - The Commission is now proposing to include all derivatives under EMIR and not just OTC derivatives.
· On the Council front, Langen revealed that there is an initiative taken by France to get rid of the information reporting threshold, just speculative trading will have to be reported. Langen said that it will be difficult to determine what is speculative trading.
· Pension funds - there is an initiative taken by the Netherlands in the Council in order to propose another type of calculations for the clearing obligation.
· Information requirement - regulators have to make sure that there is consistency with MiFID II.
· Cooperation of national supervisory bodies and ESMA - Langen proposed to move to a strengthen cooperation of national authorities with ESMA.
· Authorization for 3rd Country CCPs - Langen proposed that only if there is reciprocity and bilateral agreement, the 3rd Country CCP could obtain the authorization.
· Interoperability - Langen mentioned that there is not a proposal on how to improve interoperability.
· 90 days breach period for non-financials – Langen said that this is a way to specify between speculative and non-speculative counterparties.
Shadow Rapporteur Leonardo Domenici (S&D, IT) said that the scope of the directive should only cover OTC derivatives and not all derivatives. He was highly concerned about the exemptions in general, because it may water down the commitment agreed by the G20. Moreover, he stressed that the limitation to systemically relevant products will need more clarification. He referred to Langen’s amendment 54 and said that maybe 90 days could be regarded as too a long period.
Shadow Rapporteur Sharon Bowles (ALDE, UK) said that all the information needs to go to the repositories, regardless of being a financial or a non-financial, because systemic risk is in the system not in the institutions. Therefore, she does not support the exemption to reporting obligation.
Shadow rapporteur Pascal Canfin agreed with the exemption to companies which represent the real economy. However, he does not see a need to exempt any financial player. The exemption should be limited.
Concerning ESMA and national supervisory bodies, Canfin stressed that the ideal solution would be direct supervision by ESMA on all CCPs, alternatively, the system of colleges can efficiently deal with this. On the 90 days period he said that it may be too long.
Rapporteur Kay Swinburne (ECR, UK) said that the information reporting obligation to repositories should be done and can be done in order to reduce the risk in the system. She raised the issue of collaterals and said that it is positive to give more choice of assets to investors.
From the European Commission, Patrick Pearson (head if Unit G2 – Financial market infrastructure) said that the EC thinks that it is now better to broaden the scope to all derivatives and not just only to OTC derivatives. The EC fully supports the no- backloading clause. On the intercompany transaction exemption, Pearson said that the US is not debating about exempting intergroup transaction but about broadening the scope of Major Swap Dealer. He recognized that there is a problem with Pension funds and need to be solved. Proposals to weaken the robustness of CCPs are not supported by the Commission, he said.
Langen concluded by saying that:
· A general exemption is not necessary for pension fund, but some kind of bilateral clearing could be introduced.
· The Commission has done a U-turn on the scope of the directive; he does not understand why they did not propose to cover all derivatives initially.
· He would like the exemptions as robust as possible.
· The 90 days breach period could be negotiated.
· There is a French non-paper on what is speculative trading; each Member State is pushing to define this.
Next Steps:
· Deadline for amendments: Evening of 16 March
· Consideration of amendment - 4 April
· Vote in committee - 20 April
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