FESE responded to EC’s consultation on 'Derivatives and Market Infrastructures': ESMA should play an essential role
13 July 2010
The consultation deals with the subject of interoperability in cash equity markets. FESE believes that interoperability for cash equity deserves a separate debate and an appropriate impact assessment. Moreover, a badly designed interoperability framework could put financial markets’ security at risk
FESE welcomes the opportunity to contribute to this public consultation on ‘derivatives and market infrastructures’ which, as explained in its introduction, results from the problems identified in the OTC derivatives markets and follows the mandate of the G20 leaders’ statement agreed on 25th September 2009. FESE presented the following general remarks:
Ø This consultation covers CCP clearing of OTC derivatives, one part of the mandate of the G20 mandate. Other upcoming legislative proposals of the European Commission should cover the rest of the G20 mandate, including trading of OTC derivatives on organised venues. FESE considers that trying to meet this mandate through separate legislative proposals may produce unintended consequences and eventually put at risk the implementation of the G20 agreement by end‐2012 at the latest.
Ø The consultation deals with the subject of interoperability in cash equity markets, which is totally unrelated to the financial crisis and was not discussed by the G20 leaders. As explained below, in order to meet G20 commitments on time, the Commission should focus the upcoming legislative proposal on the implementation of the G20 mandate. Interoperability for cash equity deserves a separate debate and an appropriate impact assessment. This would be particularly important at a time when security is the priority of financial markets. A badly designed interoperability framework could put this at risk.
Ø FESE also note that the consultation suggests an important role for the future European Securities Markets Authority (ESMA). FESE believes that most of the Commission proposals in this regard are sensible. However, FESE encourages the Commission to take into account the current discussions about the future of the supervisory authorities in Europe, whose result will impact the future legislative proposals of the Commission.
© FESE
