Following on from the February 9, announcement of agreement with respect to the European Market Infrastructure Regulation (EMIR) on February 17, the European Securities and Markets Authority (ESMA) published a discussion paper on draft technical standards for the regulation of over-the-counter (OTC) derivatives, central counterparties (CCPs) and trade repositories.

The discussion paper addresses the technical standards ESMA is required to draft under EMIR in relation to OTC derivatives, CCP requirements and trade repository reporting.

The OTC derivatives section focuses on the clearing obligation, risk mitigation techniques for contracts not cleared by a CCP, and exemptions to certain requirements.

In relation to CCP requirements the discussion paper considers collateral requirements and the proposed definition of “highly liquid” collateral, use of bank guarantees and the framework for determining “haircuts” that a CCP can apply to certain types of collateral.

In relation to trade repositories the discussion paper considers the content and format of the information to be reported and the information to be made available by trade repositories to the relevant regulators.

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