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Banking
Insights - Derivatives
Dear readers,
May 2015
In this edition:
EMIR has not finished yet. There are
many open questions and uncertainties
regarding the EMIR requirements.
ESMA is trying to bring some light in to
this situation. Recently, it has released
its 13th updated EMIR Q&A, guidelines
on the definition of commodity
derivatives on recognized third-country CCPs.
ESMA publishes updated EMIR
Q&A´s
Sincerely yours,
Editor
Hagen Tiller
Hagen Tiller
Andres Prescher
ESMA publishes guidelines on
the definition of commodity
derivatives
ESMA recognizes third-country
CCPs
ESMA
ESMA publishes updated EMIR Q&A´s
The European Securities and Markets Authority (ESMA) published on 27 April 2015 the 13th update of
its Questions and Answers – implementation of the Regulation (EU) No 648/2012 on OTC derivatives,
central counterparties and trade repositories (EMIR) (EMIR Q&A).
The update focuses on the Q&A´s “Part III: Trade Repositories” (TR Questions), in particular, on the
reporting field “Maturity” and on the validations of EMIR reports.
Regarding the maturity date, the Q&A clarify that the maturity date field shall, in general, represent the
“original date of expiry of the reported contract.” Early Terminations of a contract shall not be reported
in this field. Only where the maturity date of an existing contract is subject to changes which are
already foreseen in the original contract specifications such changes shall be reported in the maturity
filed of a modification report.
Regarding the TRs validations of EMIR reports ESMA is about to start implementing the second level
validation. This means TRs will have to verify that values reported in the fields comply in terms of
content and format with the rules set out in the technical standards (Regulation (EU) No 148/2013)
Please find here the link to the ESMA press release and link to the ESMA Q&A
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ESMA
ESMA publishes guidelines on the definition of commodity
derivatives
On 6 May 2015 ESMA published its guidelines on the application of the definitions in Sections C6
and C7 of Annex I of Directive 2004/39/EC (MiFID). The guidelines apply to competent authorities
(in Germany: BaFin) who shall incorporate the guidelines into their supervisory practice and, thus,
are relevant for all regulated entities involved in derivatives trading.
The guidelines contain clarifications regarding the definition of commodity derivatives and their
classification under MiFID and are aimed at ensuring a common, uniform and consistent
application of the derivative definitions. Since these definitions are also incorporated by reference
into EMIR the guidelines have a direct impact on the application of all relevant EMIR obligations as
well. Even though the guidelines are based on MiFID1, ESMA’s express purpose is to ensure,
wherever possible, there is continuity between the application of the MiFID1 regime and the
MiFID2 regime where it comes to the definition of derivatives.
While the actual guidelines mainly confine themselves to re-phrasing what could already be
inferred before from the wording of MiFID’s Annex 1 C and Art. 38 of MiFID Implementing
Regulation (Regulation (EC) No 1287/2006) the, in our opinion, more relevant part is the
guidelines’ Annex 1. In this Annex 1 ESMA gives its view on several responses to the consultation,
e.g. regarding the effect of “secondary contractual rights” on the nature of settlement, on issues
related to “take or pay” contracts or on the definition of “commercial purposes”. These statements
provide a deeper insight into ESMA’s understanding of derivatives and help to cast more light into
some of the remaining shadows of the derivatives definition under MiFID and EMIR.
The guidelines will apply from 7 August 2015.
Please find here the ESMA guidelines
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ESMA
ESMA recognizes third-country CCPs
The European Securities and Markets Authority (ESMA) has on 29 April 2015 recognized ten
third-country CCPs established in Australia, Hong Kong, Japan and Singapore. The recognition by
ESMA allows third-country CCPs to provide clearing services to clearing members or trading
venues established in the EU.
Those CCPs are established in jurisdictions which have been assessed as equivalent by the
European Commission with regard to their legal and supervisory arrangements for CCPs. Several
other steps led to the recognition of those third-country CCPs, including the conclusion of
cooperation agreements with the relevant third-country authorities, as well as the consultation of
certain European competent authorities and central banks, as required by EMIR.
As a result, ESMA has published a list of third-country CCPs recognized to offer services and
activities in the EU. The list will be updated after each new decision on the recognition of thirdcountry CCPs.
Please find here the ESMA press release and the list of recognized third-country CCPs
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Responsible according to the press law: Dr. Markus Lange, KPMG Rechtsanwaltsgesellschaft mbH, THE SQUAIRE – Am Flughafen,
60549 Frankfurt, Germany.
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