Regulatory Outreach for Student Education

Engaging Students in the Debate Over Financial Services Reform

Today’s debate over regulatory reform is a watershed activity in the careers of financial industry professionals. Years ago, similar debates over mandated pre-funding of pension liabilities (ERISA) and the reunification of investment banking with commercial banking (Glass Steagall's repeal) changed the direction of financial market evolution. Opinions may differ on the merits of those changes, but no one disputes their significance.

Without question, college students and young professionals should be well-versed in the issues involved in today's debate. The Regulatory Outreach for Student Education (ROSE) program is the Center's way to give top students, tomorrow's business and finance leaders, opportunities to experience the financial regulatory process up-close.  The ROSE program is designed to put students in touch with the regulators, policy-makers, and industry leaders who are currently shaping the financial regulatory landscape.  We then challenge them to research and articulate their own positions on the most intriguing and interesting issues.  

ROSE Program Blog

Saturday, March 3, 2012

ESMA Issues Consultation Draft on Regulation of OTC Derivatives, CCPs and Trade Repositories

The European Securities and Markets Authority has issued a discussion draft on proposed regulation of  OTC Derivatives, CCPs and trade repositories.  The draft introduces provisions to improve transparency and reduce the risks associated with the OTC derivatives market and establishes common rules for central counterparties and for trade repositories.

The discussion paper follows the structure of the European Market Infrastructure Regulation proposal (EMIR) published in 2010, with the first section focusing on OTC derivatives and in particular the clearing obligation, risk mitigation techniques for contracts not cleared by a CCP and exemptions to certain requirements. The second part focuses on CCP requirements, where a number of provisions need to be specified through technical standards. The third part deals with trade repositories and in particular the content and format of the information to be reported to trade repositories, the content of the application for registration to ESMA and the information to be made available to the relevant authorities.


ESMA is organizing a public hearing on March 6 , 2012 to give an opportunity to interested stakeholders to express their preliminary views and to  get early feedback.  Registration for the public hearing is available online via http://www.esma.europa.eu/hearings/overview/10.  Comments on the paper are due by March 19.

As a follow up to this discussion paper, using the comments received, ESMA will prepare draft technical standards to be included in the consultation paper which will most likely be published around summer 2012.

EBA, EIOPA and ESMA are also expected to issue in the coming weeks a joint discussion paper on regulatory technical standards they are required to draft in concert. This joint discussion paper will cover risk mitigation techniques for OTC derivatives that are not cleared by a CCP, notably on capital requirements and exchange of collateral to cover the exposures arising from those transactions and on operational processes for the exchange of collateral, minimum transfer amount and intra-group exemptions.  EBA is also expected to issue in the coming weeks a discussion paper on draft regulatory technical standards on capital requirements for CCPs.
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