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Repositories Call on Esma to Help Fix Emir Reporting Problems

By Fiona Maxwell
Published May 14, 2014 Risk

The European Securities and Markets Authority (Esma) needs to help fix the region's still-new derivatives reporting regime, according to two of Europe's six authorised trade repositories (TRs).

Speaking at the annual conference of the Association of Corporate Treasurers in Glasgow today, repository executives said the number of trades that could be matched was still "very, very low" where counterparties have chosen to send their side of the transaction report to different venues – the result of widespread confusion over the unique trade identifiers (UTIs) that are supposed to help pair up the reports.

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SwapClear Dealers Cede Control as CCP Seeks Emir Approval

By Tom Osborn
Published May 13, 2014 Risk

The dealers that founded SwapClear at the turn of the millennium have given up control of the interest rate swap clearing service, following lengthy discussions. The move is required by Europe's new clearing regime, which restricts the power of shareholders in a central counterparty (CCP), and could open the door to significant changes in the competitive landscape – making it more likely that dealers move their business to a rival service and providing cross-margining opportunities for planned new futures products.

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Esma’s Maijoor: Frontloading Rule Due in Weeks

By Matt Cameron and Fiona Maxwell
Published April 29, 2014 Risk

The European Securities and Markets Authority (Esma) will publish rules on frontloading within weeks, according to Esma chairman, Steven Maijoor, who adds that the regulator is aware of the pricing headaches the provisions are causing. Frontloading is a requirement of Europe's incoming swap clearing rules that can force existing trades to be passed to a clearing house, potentially altering their cost structure.

"It is beneficial to inform the market as quickly as possible, and we will publish our views within weeks," says Maijoor, speaking with Risk. "It has not been an easy process as it is a complex issue. The level one text of the European Market Infrastructure Regulation (Emir) requires frontloading, but we understand this causes uncertainty for market participants."

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Emir Reporting Launch Was Satisfactory – Esma’s Petrenko

By Matt Cameron
Published April 11, 2014 Risk

Thousands of companies were stuck in queues when Europe's reporting regime took effect on February 12, some repositories were overwhelmed with data, and more than half of the one-sided trade reports filed so far cannot be matched up with the second side of the transaction – but the rules have got off to a satisfactory start, according to an official at the European Securities and Markets Authority (Esma).

Speaking yesterday at the annual meeting of the International Swaps and Derivatives Association in Munich, Olga Petrenko, market integrity officer with Esma, said problems had been expected and stressed the vast amount of work required by the industry.

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Esma Set to Neuter Emir Frontloading Rule

By Matt Cameron, Fiona Maxwell
Published April 4, 2014 Risk

European legislators have agreed to sideline the so-called frontloading provisions of Europe's swap clearing rules, according to members of the European Parliament (MEPs) who took part in crunch talks in Brussels yesterday. A formal letter outlining the plans is now expected to be sent by the European Securities and Markets Authority (Esma) to the European Commission (EC) – the other two participants in the three-way meeting.

Frontloading requires outstanding swaps to be cleared if they belong to a product class that is later mandated for clearing, which is a problem because cleared and non-cleared swaps are subject to very different cost structures, and could therefore have been mispriced at inception.

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EuroCCP Receives EMIR Authorization

Published April 3, 2014 Automated Trader

European Central Counterparty is now an authorised central counterparty under the European Market Infrastructure Regulation (EMIR).

DNB, the Dutch central bank granted authorisation, being EuroCCP's EMIR National Competent Authority. By granting the license, DNB confirms that EuroCCP complies with EMIR, which includes requirements in respect of risk management, governance and capital.

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EMIR Reporting Falls Short

By Helen Bartholomew
Published April 3, 2014 IFR

Market participants are in a state of confusion because of the broad scope of Europe’s mandate for reporting over-the-counter swaps transactions to data repositories. This is threatening to undermine the original G20 commitment to bring safety and transparency to the financial system, according to some infrastructure providers.

“The message to regulators is to get a move on. We’re six years in now and if you haven’t got to a stage where you’ve got 100% capture, then you’re not achieving your goal,” said David Mercer, CEO of FX exchange LMAX, speaking at the City Week International Financial Services Forum in London this week.

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EMIR Frontloading: Crunch Talks Due This Week

By Fiona Maxwell and Matt Cameron
Published March 31, 2014 Risk

Dealers are hoping a long-running saga over the retrospective scope of Europe's clearing rules will be settled this week in meetings between regulators and legislators, but they are split on what outcome to expect. Traders claim it is impossible to price transactions that might later have to be cleared, but while some expect regulators to dramatically limit this impact, others are more pessimistic.

Three bankers told Risk that a meeting on the issue – known as frontloading – has been scheduled this week between the European Securities and Markets Authority (Esma) and the European Commission (EC). That is confirmed by a spokeswoman for Esma, who adds that members of the European Parliament (MEPs) will also be involved.

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Majority of Emir Derivatives Reports Cannot be Matched, Say Repositories

By Fiona Maxwell
Published March 24, 2014 Risk

Missing trade and entity identifiers mean up to 60% of derivatives trades reported under the Emir regime cannot be paired with their corresponding halves, say trade repositories

European repositories are warning up to 60% of derivatives trade reports entering their systems cannot be matched with their corresponding halves, leaving vast numbers of orphaned reports and a patchy picture of what is happening in derivatives markets.

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New Clearing Rules Vex Buyside Firms

By Phil Albinus
Published March 14, 2014 Traders Magazine

With the passage of Dodd-Frank and other regulatory mandates, buyside firms have to focus on the clearing of over-the-counter derivatives. Combined with Dodd-Frank in the U.S. and Basel III and the European Markets Infrastructure Regulation in Europe, the challenges of clearing these trades are more complex than ever.

Both Dodd-Frank Title VII and EMIR mandate that OTC contracts need to be cleared centrally for the vast majority of participants. According to Steve Grob, director of group strategy for Fidessa, the move from bilateral to centralized clearing creates a number of challenges for the buyside.

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