EUROPE - The European Securities and Markets Authority (ESMA) will launch a new consultation process on the EMIR Directive this summer and aims to deliver its report on technical standards to the European Commission by the end of September.

Speaking at the International Capital Market Association (ICMA) conference in Milan, Verena Ross, executive director at ESMA, reminded the audience that, after both the European Parliament and the Council approved the EMIR Directive back in February, ESMA was now due to deliver draft regulatory implemented technical standards.

It is currently preparing the legal text for around 40 technical standards to be delivered under the EMIR Directive.

The European authority is seeking to launch a new consultation process this summer.

"We are now looking to publish another consultation paper soon, and we will hold a public hearing in July to take the work forward," Ross said. "At that point, we will be consulting on the legal texts for those standards."

ESMA is likely to consult for about six weeks from the last week of June to the first week of August in order to be able to deliver the technical standards to the Commission by the deadline that ESMA was given, at the end of September.

Ross added: "The deadline is intended to ensure that the Commission can endorse the standards by the end of the year and therefore meet the G20 commitments on reviewing the OTC derivatives market to be centrally cleared by the end of the year."

Back in 2009, the G20 leaders agreed at the Pittsburgh summit that, by end of 2012, all standardised OTC derivative contracts traded on exchanges or electronic trading platforms would be cleared through central counterparties, and that OTC derivatives would be reported to trade repositories and non-centrally cleared contracts subject to higher capital requirements.

"Most of those requirements are being looked at through the EMIR Directive, while the rest will be done through MiFID," Ross said.

Ross called on the audience to take part in the consultation on the EMIR Directive's technical standards, adding that the changes to the market would have a "significant" impact on anyone trading derivatives.

"We hope very strongly that many of you will actively engage in the oncoming consultation despite the fact it will come over the summer and holiday period," she said.

In spite of their temporary exemption from the EMIR Directive, a number of pension funds, which tend to use derivatives instruments for hedging purposes, still fear the new regulation will lead to extra costs, since variation margins for centrally cleared trades will have to be posted in the form of cash, while a requirement for initial margins will also be included in their derivatives trades under the EMIR text.

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