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
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.
The EBF is the voice of the European banking sector, bringing together national banking associations from 45 countries. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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