EU Derivatives Clearing Fight With U.S. Moves Toward Resolution
- ESMA proposes allowing 1-day initial margin on gross amount
- Move would allow EU, U.S. to offer equivalence to each other
This article is for subscribers only.
European Union regulators are considering amending rules on central clearing of derivatives trades in a bid to end a long-running dispute with the U.S. that threatens to fragment markets.
The European Securities and Markets Authority on Monday proposed to reduce the amount of collateral needed to cover potential losses to one day’s activity on a position, as in the U.S., from two days as is currently the situation in Europe. The rules would apply to gross omnibus accounts and individual segregated accounts for exchange-traded derivatives and securities -- essentially futures and options -- and doesn’t affect the swaps market, where contracts are traded bilaterally.