Coming weeks could be decisive for EMIR’s “open account” requirement

VIDEO | The European Union’s ambition to move certain clearing activities from Britain into the EU has been evident – but the exact measures to push it haven’t. Before Christmas, key political proposals are expected for EMIR 3.0, the next version of the financial infrastructure regulation. This panel of clearinghouse representatives, in the PostTrade 360° Helsinki conference, looked into where the market could be going. 

The session was sponsored by Cboe Clear Europe, Eurex, and LSEG.

Panellists were:
Lennart Visser, Relationship Manager Sales, Cboe Clear,
Christopher Anderson, Sales Nordics and Scandinavia, Eurex,
Joanne Donaghey, Post Trade Sales Director, LSEG,
under moderation by Gabriel Vimberg, Investor Services, SEB.

The regulatory mills of, respectively, the European Council and the European Parliament, should have completed their grinding of the EMIR 3 proposal around late November, or December. This should help add some clarity for the markets, although a long process of “trilogue”, and then the working out by Esma of the technical standards, could take another year or so.

The EU moves to shift clearing into Europe have primarily touched on euro-denominated interest-rates swaps, with interest-rate futures, and indices, being in scope, too. With Britain’s exit from the EU some years ago, some migration could be observed in OTCs, notably from LSEG, which dominates the space, to Germany-based Eurex. One tool meant to contribute is a requirement for market participants to have an “active account” with an EU-based clearinghouse for the asset classes in scope. What an active account would be, precisely, remains to be disclosed.

In the cash securities space, Cboe Clear’s Lennart Visser expressed hope for an uptick in the regulatory promotion of open access for clearinghouses at trading venues, and of interoperability regimes, which enable two trading parties to each commission its own clearinghouse.