Response by Sveriges Riksbank to the Public Consultation on Regulation (EU) 648/2012 on OTC-derivatives, central counterparties and trade repositories

The European Commission is mandated to conduct a review of Regulation (EU) 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR). In connection with that, the European Commission has issued a public consultation, the purpose of which is to obtain feedback from stakeholders on their experiences in the implementation of EMIR to date. Feedback received as part of the consultation will provide important guidance to the Commission services in conducting the review.

An important milestone in implementing the G20 commitment in the EU was reached with EMIR. The Regulation requires standard OTC-derivative contracts to be cleared through central counterparties (CCPs), requires margins for uncleared trades and establishes stringent organisational, business conduct and prudential requirements for CCPs. The Regulation also ensures that information on all European derivative transactions are reported to trade repositories and be accessible to authorities. 

Sveriges Riksbank welcomes the public consultation on EMIR and the opportunity to comment on the consultation document. The Riksbank’s experience, not least from participation in CCP colleges, shows that there are issues that need to be addressed within the context of EMIR and its technical standards. 

One of the Riksbank’s key points is that the issue whether CCPs’ should have access to central bank liquidity and if so, under what conditions, must respect the principle of central bank independence. According to this, central banks have an inalienable right to provide such access at their own discretion in accordance with their mandates. Consequently, access to central bank facilities should not be regulated by EMIR. 

Another key point is that international standard setting groups as FSB, BCBS, CPMI and IOSCO are undertaking significant work on international standardisation to foster international convergence. Therefore, all adjustments to EMIR should bear in mind the ongoing international work. It is therefore of utmost importance that the EMIR review is carried out while ensuring a consistent framework internationally and avoiding inconsistencies in a globally active market that could trigger competitive distortions and level playing field issues.