Delegated regulation 2016/592 - Supplement to Regulation 648/2012 with regard to regulatory technical standards on the clearing obligation

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1.

Current status

This delegated regulation has been published on April 19, 2016 and entered into force on May  9, 2016.

2.

Key information

official title

Commission Delegated Regulation (EU) 2016/592 of 1 March 2016 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on the clearing obligation
 
Legal instrument delegated regulation
Number legal act Delegated regulation 2016/592
CELEX number i 32016R0592

3.

Key dates

Document 01-03-2016; Date of adoption
Publication in Official Journal 19-04-2016; OJ L 103 p. 5-11
Effect 09-05-2016; Entry into force Date pub. +20 See Art 5
End of validity 31-12-9999

4.

Legislative text

19.4.2016   

EN

Official Journal of the European Union

L 103/5

 

COMMISSION DELEGATED REGULATION (EU) 2016/592

of 1 March 2016

supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on the clearing obligation

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (1), and in particular Article 5(2) thereof,

Whereas:

 

(1)

The European Securities and Markets Authority (ESMA) has been notified of the classes of credit over the counter (OTC) derivatives that a central counterparty (CCP) has been authorised to clear. For each of those classes ESMA has assessed the criteria that are essential for subjecting them to the clearing obligation, including the level of standardisation, the volume and liquidity, and the availability of pricing information. With the overarching objective of reducing systemic risk, ESMA has determined the classes of credit OTC derivatives that should be subject to the clearing obligation in accordance with the procedure set out in Regulation (EU) No 648/2012.

 

(2)

The tenor is one common and essential characteristic of credit OTC derivatives. It corresponds to a fixed date on which a credit derivative contract expires. That feature should be taken into account when defining the classes of credit OTC derivatives to be subject to the clearing obligation.

 

(3)

Different counterparties need different periods of time for putting in place the necessary arrangements to clear the credit OTC derivatives subject to the clearing obligation. In order to ensure an orderly and timely implementation of that obligation, counterparties should be classified into categories in which sufficiently similar counterparties become subject to the clearing obligation from the same date.

 

(4)

A first category should include both financial and non-financial counterparties which, on the date of entry into force of this Regulation, are clearing members of at least one of the relevant CCPs and for at least one of the classes of credit OTC derivatives subject to the clearing obligation, as those counterparties already have experience with voluntary clearing and have already established the connections with those CCPs to clear at least one of those classes. Non-financial counterparties that are clearing members should also be included in this first category as their experience and preparation towards central clearing is comparable with that of financial counterparties included in it.

 

(5)

A second and a third category should comprise financial counterparties not included in the first category, grouped according to their levels of legal and operational capacity regarding OTC derivatives. The level of activity in OTC derivatives should serve as a basis to differentiate the degree of legal and operational capacity of financial counterparties, and a quantitative threshold should therefore be defined for division between the second and third categories on the basis of the aggregate month-end average notional amount of non-centrally cleared derivatives. That threshold should be set out at an appropriate level to differentiate smaller market participants, while still capturing a significant level of risk under the second category. The threshold should also be aligned with the threshold agreed at international level related to margin requirements for non-centrally cleared derivatives in order to enhance regulatory convergence and limit the compliance costs for counterparties. As in those international standards, whereas the threshold applies generally at group level given the potential...


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This text has been adopted from EUR-Lex.

 

5.

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