Joint Discussion Paper on Draft Regulatory Technical Standards on risk mitigation techniques for OTC derivatives not cleared by a CCP

06 March 2012

The EBA, EIOPA and ESMA (the ESAs) invite market participants and all interested stakeholders to provide their feedback on planned regulatory technical standards covering risk mitigation techniques for OTC derivatives not cleared by central counterparties. The EMIR Regulation ("the Regulation") on OTC Derivatives, CCPs and trade repositories introduces provisions to improve transparency and reduce the risks associated with the OTC derivatives market and establishes common rules for central counterparties (CCPs) and for trade repositories (TRs). The Regulation acknowledges that not all OTC derivatives would meet the necessary requirements to be centrally cleared. For this reason, it introduces provisions on risk mitigation techniques for OTC derivatives not cleared by a CCP.

In this respect, the Regulation delegates powers to the European Commission to adopt Regulatory Technical Standards (RTS) on the level of capital and collateral counterparties to derivatives transactions need to maintain, type of collateral and segregation arrangements as well as on the procedures to apply an intragroup exemption.

The ESAs are required to jointly develop draft regulatory technical standards on these matters. This discussion paper analyses possible options that the ESAs are currently considering for the development of these draft technical standards.

In addition, following this discussion paper and on the basis of the relevant input received, the ESAs will prepare draft technical standards to be included in the consultation paper which will most likely be published around summer 2012.
ESMA already published a discussion paper  on 16 February 2012 on the draft RTS and Implementing Technical Standards (ITS) which it is required to develop. The EBA is also publishing today together with this joint discussion paper a discussion paper on draft RTS on capital requirements for CCPs.

To facilitate an efficient processing of the information, it was agreed between the three ESAs that ESMA will be centrally collecting the answers.

The consultation will end on Monday 2 April, at 18.00 HRS CET.

All contributions should be submitted online at under the heading ‘Your input - Consultations'.


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