Firms that will have to come to grips with the ‘frontloading requirement’ (see previous article) will be interested in the recent ESMA Review of the EMIR Framework (2015/1254). The content is being submitted to the European Commission to feed into the general report on EMIR that it will prepare and submit to the European Parliament and European Council.
Section 4 concerns the clearing obligation with a recommendation for greater flexibility such as the need for a mechanism at EU level to suspend (temporarily) the clearing obligation in response to market events such as the failure of a CCP. One other proposal is the possible removal of the frontloading requirement – “The EMIR review may consider weighing further the pros and cons of frontloading and decide whether this requirement should be kept at all” (page 12).
