ESMA Consults on Extension of Scope of Clearing and Derivatives Trading Obligations

The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, today launches a consultation exploring the extension of the scope of both the Clearing Obligation (CO) and the Derivatives Trading Obligation (DTO).

Fazzaco Business Awards 2022 Officially Kicks Off

The proposals contained in the consultation, based on the progress made with the benchmark transition in the interest rate derivative market, introduce additional classes to the scope of the CO and of the DTO. These changes complement the first set of changes developed also in the context of the benchmark transition.

ESMA's proposal includes the introduction of the overnight indexed swap (OIS) class referencing TONA (JPY); the expansion of the maturities in scope of the CO for the OIS class referencing SOFR (USD); and the introduction of certain classes of OIS referencing €STR (EUR), which have shown a substantial increase in liquidity over the last months.

In November 2021, ESMA published a first set of technical standards on the CO and DTO amending the respective scopes of these two obligations in view of the benchmark transition, which entered into force in May 2022.