The European Securities Markets Authority (ESMA) has offered respite to ‘Category 3’ firms struggling to comply with European Market Infrastructure Regulation (EMIR) implementation burdens.
The regulator has postponed the phase-in date for central clearing of over-the-counter (OTC) derivatives until 21 June 2019.
In ESMA’s final EMIR report, in which it published its draft regulatory technical standards, it acknowledged that small, low-volume counterparties were struggling to establish clearing arrangements to meet the original compliance deadline, which was set for 21 June 2017.
The decision comes in response to feedback from ESMA’s July consultation paper in which it asked for feedback on Category 3 phase-in progress.
“Not surprisingly, there appears to be a close link between the level of preparedness of the counterparties and their size, or the size of their derivative activity, as those claiming to have finalised their clearing arrangements are generally found to be large asset managers or insurance companies,” explained ESMA in the report.
The proposed amendments have been sent to the European Commission for comment, which is expected within the next three months.
