ESMA Consults on Calculation of Derivative Positions by Repositories
ESMA published, for public consultation, draft guidelines on the calculation of derivative positions by trade repositories authorized in the EU under the European Market Infrastructure Regulation (EMIR). ESMA seeks stakeholder views by January 15, 2018 and expects to publish a final report on the guidelines in the first half of 2018.
The guidelines will provide specific information on the aggregation of certain data fields and how those should be calculated by trade repositories prior to the provision of the data to the national competent authorities, including timing of calculations, scope of the data used in calculations, and calculation methodologies.These guidelines will also ensure consistency in relation to collateral calculations for derivative positions. EMIR also requires trade repositories to make available information on derivative positions to central banks in the currency that they issue. To this end, the guidelines propose that a single report is made available to each central bank of issue, with an aggregated view of potential exposures between counterparties in the specific currency for which they are the issuers.
In the past, ESMA has observed divergent and inconsistent approaches to derivative position calculations by trade repositories. This poses challenges toward successful aggregation of data across the seven trade repositories in the EU. The proposed guidelines are intended to ensure consistency of position calculations across trade repositories.
Related Link: Consultation Paper (PDF)
Comment Due Date: January 15, 2018
Keywords: Europe, EU, Securities, Trade Repositories, OTC Derivatives, Position Calculations, EMIR, ESMA
Related 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