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Esma to align indirect clearing rules 

October 8, 2015

Helen Bartholomew, IFR Asia

The European Securities and Markets Authority has opened a new consultation on rules for indirect clearing of over-the-counter and exchange traded derivatives. The regulator is hoping to reverse an inconsistent approach to the currrent requirements, which fall under two separate pieces of legislation.

Esma chairman Steven Maijoor has written to Europe’s financial stability commissioner, Jonathan Hill, explaining the regulator’s decision to exclude new rules for indirect clearing for exchange-traded derivatives from final regulatory technical standards for Mifid II that were published last week.

“Stakeholders have unanimously raised a series of important concerns. In order to address these concerns, it is necessary to develop alternative requirements for both OTC derivatives and exchange-traded derivatives than those requirements set in the Emir RTS,” wrote Maijoor in his letter.

Indirect clearing, which enables derivatives users to access clearing houses by facing a client of a clearing broker rather than the broker itself, has already been addressed for cleared OTC swaps under the European Market Infrastructures Regulation. But as an entirely new concept in the OTC market, its practical applicability has been limited.

Read more: IFR Asia

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