Consequence of the trading obligation required by MIFIR on the cessation of the clearing of Credit Default Swaps by ICE Clear Europe - ESMA position

While the movement should not be too difficult for most CDSs subject to the clearing obligation established by EMIR¹, the same is not true for those² which are also subject to the trading obligation under MIFIR³.

ESMA⁴, at the request of the industry, has just published a letter (March 30, 2023) in which it recalls that it does not have the power to waive an obligation arising from a legal text. However, it recognises the need for an exemption specifically for the transfer of positions. It is therefore through a letter (already used in the past) addressed to local regulators that the European regulator proposes to solve the problem: supervisory authorities are invited not to prioritise their supervisory actions over compliance with the trading obligation concerning positions to be migrated.

ESMA letter.

* CCP: Central Counterparty Clearing House
1 EMIR: Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositoriesText with EEA relevance (europa.eu)
2 COMMISSION DELEGATED REGULATION (EU) 2017/ 2417 - of 17 November 2017 - supplementing Regulation (EU) No 600 / 2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on the trading obligation for certain derivatives (europa.eu)
3 Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012Text with EEA relevance (europa.eu)
4 ESMA: European Securities and Market Authority