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The European Securities and Markets Authority (ESMA) published a feedback statement on its consultation on the clearing obligation for non-deliverable forwards (NDF) which it had to conduct under the European Markets Infrastructure Regulation (EMIR).
EMIR requires ESMA to draft technical standards regarding the clearing obligation of different derivative classes. This feedback statement summarises the responses received to the consultation.
Based on the feedback received, ESMA is not proposing a clearing obligation on the NDF classes at this stage. ESMA believes that more time is needed to appropriately address the main concerns raised during the consultation.
The consultation paper on the clearing obligation covering non-deliverable foreign-exchange forwards contained 10 questions to stakeholders pertaining to the various aspects of the draft RTS included therein. This feedback statement summarises the comments received to the consultation.
This decision is without prejudice to the possibility for ESMA to propose a clearing obligation on the NDF classes (by the submission of a final report to the European Commission including a draft RTS) at a later point in time to take into account further market developments.
ESMA takes note of the comments, in particular the ones related to the timing for the entry into force of a potential clearing obligation on non-deliverable forward classes, and its link with the CCPs (in EU or third-countries) available to clear NDF, the experience of counterparties with NDF clearing, and the importance of international consistency in the implementation schedule of the clearing obligation.
In this respect, ESMA considers that the criteria for the determination of the clearing obligation should be further assessed considering the global nature of the FX market.