On February 8, the European Commission (EC) consulted on the review of the central clearing framework in the EU.
ISDA welcomes the opportunity to thank the Commission for the dialogue-based approach it has taken so far on the topic of the central clearing framework in the EU and also the Commission’s open-mindedness and willingness to listen to and consider industry concerns in their decision making. ISDA encourages the EC to continue along this path and stands ready to discuss these issues with the Commission.
ISDA members do not agree with the Commission’s assessment that the use of tier-two central counterparties (CCPs), including those located in the UK, is a source of unmitigated financial stability risk for the EU, given that the European Market Infrastructure Regulation (EMIR) and EMIR 2.2 are sufficiently robust to ensure safe clearing. In this light, we believe that any measures that force clearing participants (clearing members and their clients) to use certain CCPs will be damaging to the overall derivatives market including the Capital Markets Union, clearing participants and end users, especially those in the EU.
Clearing participants should be free to choose where to clear, based on commercial and risk considerations. EU markets will be the most attractive to investors and market participants where they are open, innovative, dynamic and responsive. It is important that EU derivatives regulation acknowledges the global nature of the derivatives market and seeks to foster open markets with international jurisdictions based on the key principles of deference, as well as supervisory and regulatory cooperation.
We welcome that the Commission has identified positive measures in its consultation paper, that would make clearing in the EU truly more attractive. We ask the Commission to focus on these measures.
We propose that the Commission should consider a wider review how financial regulation in the EU could be aligned and streamlined, for instance in the areas of the Markets in Financial Instruments Directive, the directive on undertakings for collective investments in transferable securities and the link between recognition and the qualifying status in the Capital Requirements Regulation.
Documents (1) for ISDA Responds to EU Commission on Euro Clearing Review
Latest
IRD Trading Activity FY 2025 and Q4 2025
This report analyzes interest rate derivatives (IRD) trading activity reported in Europe. The analysis is based on transactions publicly reported by 30 European approved publication arrangements (APAs) and trading venues (TVs). Key highlights for the full year 2025 include: European...
A Financial Markets Revolution
Every financial center has its own unique features, but it was particularly fitting that ISDA’s recent Annual General Meeting (AGM) was held in Boston – not only a global hub for asset management and insurance, but also a city that...
ISDA AGM Studio: Nnamdi Okaeme & John Pucciarelli
Marking the 10‑year anniversary of the ISDA Standard Initial Margin Model (ISDA SIMM), Joel Clark, senior director, communications, at ISDA, speaks with Nnamdi Okaeme, ISDA’s head of SIMM, and John Pucciarelli, head of partnerships and director of industry engagement at...
Response on Legal Frameworks for Carbon Credits
On May 4, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Commission’s (EC) consultation on a legal framework for the inclusion of international carbon credits within the EU’s 2040 climate law framework. In the...
