In an effort to expand its oversight of clearing activity, the European Securities and Markets Authority (ESMA) is launching a consultation on reporting requirements for foreign central counterparties (CCPs).
The regulators published a consultation paper that proposes standards for firms to report their activity involving foreign CCPs in order to enhance their supervisory visibility of firms’ exposures to, and dependency on, these clearing providers. It is a regulatory priority that is particularly relevant in the current geopolitical environment, it noted.
“The objective is to provide supervisory authorities with a structured and consistent overview of the scale, characteristics and risk profile of EU firms’ exposures to recognized third-country CCPs,” it said.
The proposals also aim to limit the addition of new reporting requirements, and enable firms to recycle information that’s already being reported through existing channels — in an effort to minimize the added regulatory burden, the paper noted.
“Regulatory reporting regimes have been widely identified by industry, regulators and policy makers as an area where simplification could deliver significant benefits, without undermining their essential role in supporting financial stability, enhancing market transparency and preventing market abuse,” it said.
To that end, the new reporting requirements are based on an assessment that aimed to identify the information that’s already available to regulators under existing reporting regimes, and find gaps in that information that need to be filled with new reporting demands.
ESMA is seeking feedback on the proposals by Oct. 12, and aims to publish a final report in the fourth quarter.