NASDAQ OMX becomes first approved European CCP under EMIR

On 18 March, Nordic clearing house (CCP) NASDAQ OMX became the first approved CCP under the new regulatory regime of the European Market Infrastructure Regulation (EMIR). The authorisation was granted by the Swedish FSA and followed an opinion handed down by a college of regulators consisting of a mix of capital markets authorities and central banks from Denmark, Finland, Norway, Sweden, the UK and the European Central Bank.

The college of regulators that decides upon the application of a CCP consists of the competent authorities (CAs) where the CCP is domiciled, CAs of the EU members states in which the three largest contributors to the CCP’s default fund are domiciled, CAs of the trading venues served by the CCP, CAs supervising Central Securities Depositories (CSDs) linked to the CCP, The European Security and Markets Authority (ESMA) and the central bank which issues the most relevant European Union (EU) currencies of the financial instruments cleared at the CCP.

NASDAQ OMX successfully responded to all questions in the months since its application was first submitted and is now the first authorised EMIR-compliant CCP. “This approval highlights our leading position in the clearing space,” said Hans-Ole Jochumsen, executive vice president, transaction services Nordic, NASDAQ OMX.  “Our clearing house was the first with true multi-asset derivatives clearing in Europe. Now, as the first to be EMIR authorised, we can focus on further developing our offering, including an expansion within interest rate swaps and German power derivatives, as well as introducing clearing of foreign exchange products.”

The Stockholm-based CCP offers clearing in equity, interest rate and commodity derivatives. It will now be waiting on ESMA’s issuance of the draft regulatory technical standards (RTS), which, according to ESMA’s EMIR indicative timeline, should be issued no more than six months after the authorisation of a CCP. Expect that by 18 September. The RTS will be issued in relation to the clearing obligation and what contract types, exactly, will be required to be cleared.

The draft RTS will be passed to the European Commission and the council of the European Parliament for approval. If both approve without objection to the RTS, then the earliest mandatory clearing can commence is 18 December 2014. If there are objections, then 18 July 2015, or 16 months after the approval of the first CCP, is the maximum time limit.

Authorisation of the remaining 21 CCPs in the EU may take a little time to filter through, but the ball is now rolling with NASDAQ OMX first over the line. “We expected NASDAQ OMX to be approved under EMIR and this is testimony to the hard work conducted by them in Scandinavia,” says Thomas Krantz, senior advisor at Thomas Murray. “From what we have learned from the CCP Risk Assessment programme that we are running, we also expect the remaining applicants to receive reauthorisation under EMIR in due course as well.”

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