The European Securities and Markets Authority is consulting on the mandatory clearing obligation for certain derivatives. Draft regulatory technical standards have been published for the mandatory clearing of certain interest rate swaps and credit default swaps. This note considers the proposals and the corresponding US rules and sets out the timing for implementation of the first EU clearing obligations.

Classes of IRS and CDS Proposed for the Clearing Obligation The European Markets Infrastructure Regulation (EMIR) introduced the concept of an obligation to clear certain classes of over-the-counter (OTC) derivatives through central counterparties (CCPs)1. ESMA is required to prepare draft Regulatory Technical Standard (RTS) on the clearing obligation within six months of the authorisation or recognition of the relevant CCPs.