EBF response to ESMA consultation on
the clearing obligation for financial counterparties
with a limited volume of activity

EBF advisor: Simon Pettinger Kearney

Publication date: 05 September 2016

Key points:

• The majority of EBF members support the proposal to extend the phase-in period for the clearing obligation to category 3 counterparties (the smallest financial counterparties) and partly raise concerns over this proposal. Those EBF members supporting the proposed delay point to the difficulties category 3 counterparties are facing in accessing CCP clearing services.
• However, some of EBF members also raise concerns over this proposal. They point to the potential negative impact of a delay in view of the investments and efforts already undertaken to initiate clearing which may mean that the delay will actually work as a disincentive to continue with the effort to extend and set up clearing services. In addition they believe that such a delay may not help to alleviate the underlying structural and regulatory reasons which ultimately cause the problems category 3 counterparties are facing, and that these underlying issues, including the cost of capital related to providing clearing services under the leverage ratio, must be addressed during any extended implementation timelines.