ESMA Issues Guidelines on Anti-Procyclicality Margin Measures for CCPs
ESMA issued the final guidelines on anti-procyclicality margin measures for central counterparties (CCPs) under the European Market Infrastructure Regulation (EMIR). The guidelines will become effective from December 03, 2018. The existing CCP questions and answers (Q&A) 9(c) will be deleted as of the same date as the new guidelines cover its purpose.
Under EMIR, CCPs are required to monitor and account for procyclical effects of margins, including to make disclosures on its risk management practices such as the models used for the calculation of margins. To this end, these guidelines promote consistent supervision of such requirements, including monitoring of the procyclicality of margin requirements, implementation of anti-procyclicality margin measures, and disclosures to facilitate margin predictability. The guidelines seek to establish consistent, efficient, and effective supervisory practices and to ensure a common, uniform, and consistent application of EMIR to limit procyclicality of CCP margins.
The adoption of the guidelines should enable national competent authorities to better supervise their CCPs in this respect. CCPs may also need to adapt their models and processes to the guidelines. The guidelines will be translated into the official languages of EU and within two months from the date of publication of the translations, each national competent authority must notify ESMA of its intent to whether or not to comply with the guidelines.
Related Links
Keywords: Europe, EU, Securities, Guideline, Procyclicality, CCPs, EMIR, ESMA
Previous Article
CFTC Issues Advisory on Virtual Currency Derivative Product ListingsRelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards