Clearers ensure that derivatives and other financial transactions are completed, even if one side of a deal goes bust, and are core to making the opaque $630 trillion swaps market more transparent and safer.
"One element we still need to work on is the recovery and resolution of CCPs", Steven Maijoor, chairman of ESMA, said. “CCPs are in the slipstream of the debate over banks. At the moment there is no clear protocol about how to save or resolve international CCPs, which will become more important from 2014 on", Maijoor said.
Whatever their eventual form, the new regulations will prompt big changes in this obscure but essential part of international financial transactions.
ESMA is also holding intensive talks with US supervisors on over-the-counter derivatives clearing, hoping to secure as little divergence as possible in the rules on both sides of the Atlantic. "This is an area that is extremely susceptible to an un-level playing field. Small differences in margin requirements will determine where trade can take place", Maijoor said. "OTC derivatives clearing will fundamentally change the landscape", Maijoor said, adding that market forces, rather than financial supervisors themselves, would determine the winners among companies competing in the area.
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