ESMA Reviews Clearing And Derivatives Trading Obligations07.12.2022
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, launches a consultation exploring the extension of the scope of both the Clearing Obligation (CO) and the Derivatives Trading Obligation (DTO).
The proposals contained in the consultation, based on the progress made with the benchmark transition in the interest rate derivative market, introduce additional classes to the scope of the CO and of the DTO. These changes complement the first set of changes developed also in the context of the benchmark transition.
🆕 CO → overnight indexed swap (OIS) class referencing TONA (JPY)
🆕 DTO → classes of OIS referencing €STR (EUR) pic.twitter.com/xw7jmH952P
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) July 11, 2022
ESMA’s proposal includes for:
- the CO
- the introduction of the overnight indexed swap (OIS) class referencing TONA (JPY);
- the expansion of the maturities in scope of the CO for the OIS class referencing SOFR (USD); and
- for the DTO – the introduction of certain classes of OIS referencing €STR (EUR), which have shown a substantial increase in liquidity over the last months.
In November 2021, ESMA published a first set of technical standards on the CO and DTO amending the respective scopes of these two obligations in view of the benchmark transition, which entered into force in May 2022.
Stakeholders, in particular counterparties of OTC derivatives transactions which are subject to the clearing obligation or the derivative trading obligation as well as from CCPs and Trading Venues, are invited to respond to this consultation by 30 September 2022.
CONSULTATION PAPER ON CO AND DTO REFERENCING ESTR
The new futures will help customers manage sovereign debt risk in Europe.
HKEX launched its first A-shares index futures contract in October 2021.
Euro-denominated cryptocurrencies are the second highest traded fiat behind the U.S. dollar.
All fixed income workflows can be handled from one application.
Margin and collateral are a new use case for bond ETFs.