On 17 July 2013, ESMA opened its consultation for draft RTS under EMIR on contracts having a direct, substantial and foreseeable effect within the European Union and non-evasion of the provisions of EMIR. The consultation clarifies the position on the application of EMIR central clearing or risk mitigation obligations to OTC derivatives contracts between non-EU counterparties which have a direct, substantial and foreseeable effect within the EU.
The obligations would apply only when (i) both counterparties to a transaction are established outside the EU; and (ii) the rules in both jurisdictions are not considered to be equivalent to EMIR; and either (a) one of the counterparties is guaranteed (above certain thresholds) by an EU financial counterparty; or (b) both counterparties execute the transaction via their EU branches. There are also anti-evasion provisions requiring business substance and economic justification for the use of non-EU counterparties to the transaction.
The European Commission has extended the deadline for ESMA to submit to the Commission the draft RTS on the cross-border application of EMIR from 25 September to 15 November. The extension has been given to allow ESMA sufficient time to analyse the responses to its consultation.
The consultation paper is available at:
http://www.esma.europa.eu/system/files/2013-892_draft_rts_of_emir.pdf
Our client note on this advice is available at:
RTS on CCP Colleges Published
The secondary legislation under EMIR setting out the operational organisation and governance of supervisory colleges that must be set up to consider the application of a CCP for authorisation was published in the European Official Journal (Commission Delegated Regulation (EU) No 876/2013 of 28 May 2013 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on colleges for central counterparties, "Delegated Regulation"). The Delegated Regulation came into force on 3 October 2013.
The Delegated Regulation is available at:
http://new.eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2013.244.01.0019.01.ENG
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.