Brussels, 01/03/2016 (Agence Europe) - On Tuesday 1 March, the European Commission proposed that certain credit default swaps are gradually brought under a centralised clearing scheme operated by central counterparties (CCPs).
Drafted on the basis of an opinion of the European Securities and Markets Authority (ESMA), this implementing measure of Regulation 648/2012, which lays down the rules on market infrastructure, refers in particular to CD products in Euro and covering the default risk of European companies. Once it is adopted, it will be rolled out to four categories of financial products over a maximum period of three years (interim periods of nine months for category 1, 15 months for category 2, 21 months for category 3 and three years for category 4), in order to give smaller players time to comply with the future rules.
This new obligation will help to make the financial markets more stable and less risky and will create an environment which is more conducive to investment, the Commission argues. The proposal aims to respect commitments taken at G20 level regarding financial stability, the Commissioner for Financial services, Jonathan Hill, explained in a press release.
In August 2015, the Commission tabled rules which would require certain over-the-counter derivative contracts to be cleared by CCPs (see EUROPE 11372). According to the Commission, similar proposals for other over-the-counter derivatives are to follow shortly. (Original version in French by Mathieu Bion)