Author: David Schwartz J.D. CPA
In their joint response to the European Securities and Markets Authority (ESMA) draft technical standards for the regulation on OTC derivatives, the Dutch Pension Federation, APG, MN, PGGM, Shell and Syntrus Achmea Asset Management, major players in the Dutch pension industry, were highly critical of the proposals, and said they could do more harm than good. They note that the proposals have a high probability of increasing costs for pension funds and their administrators, costs that will ultimately be borne by pension beneficiaries. While ESMA has said that the proposals aim to reduce risks via the use of central clearing and risk mitigation techniques and increase confidence with respect to margins, the joint response from the Pension Federation says that they are not convinced that the increase of the confidence level with regard to the margin will automatically lead to more safety.