ESMA Publishes Updated Q&A on Derivatives Regulation

The European Securities and Markets Authority (“ESMA”) published an updated version of its “Question and Answers” document (“Q&A”) with a new question regarding the reporting of market-to-market value.  The ESMA Q&A is intended to provide common supervisory approaches and practices in the application of European Market Infrastructure Regulation (“EMIR”).  The questions are organized around three major topics: OTC issues generally, central counterparties and trade repositories.

Lofchie Comment:  The questions and answers document raises lots of interesting new questions for firms that are subject to regulation both in the United States and the European Union.  To start with a very basic and open point, how comparable is the EU definition of “OTC derivative” (see question 1) to the Dodd-Frank definition of “swap agreement”?  On the cross-border front, the EU requirements seem to base nationality on the location of an organization (see Trade Repository Question 15), which is a narrower definition of national status than is the case in the CFTC definitions, and likely narrower than will be the case in the SEC definitions.

See: Question and Answers: Implementation of the Regulation (EU) on OTC Derivatives, Central Counterparties, and Trade Repositories (EMIR).