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Uncompetitive clearing market could trigger 'unmanageable' risks 

August 19, 2015

Jonathan Williams, IPE

Lack of competition within the clearing market could expose pension funds to unmanageable risks and higher than necessary costs, according to PensionsEurope.

The European industry group also argued that the European Market Infrastructure Regulation (EMIR), which currently offers the pensions sector a time-limited exemption from centrally clearing derivatives trades, should be amended to allow the exemption to continue indefinitely.

Responding to a consultation by the European Securities and Markets Authority (ESMA) on recommended changes to the EMIR framework, PensionsEurope argued the regulation risked not achieving its goal of increasing financial stability, while leading to higher costs for the pensions sector if no further consideration was given to the use of cash as collateral.

Read more: Investment & Pensions Europe

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