The European Securities Markets Authority (ESMA) has published its final draft for the regulatory technical standards for the central clearing of interest rate swaps, under the European Markets Infrastructure Regulation (EMIR).

Overall, the standards set out for investors which type of interest rate swaps are required to be centrally cleared, the types of counterparties covered by the regulation and the dates by which central clearing becomes mandatory.

Financial firms will begin the three-year phase-in of EMIR, expected to start next year.

Clearing firms will have six months after the regulatory standards become regulation to ensure all swaps included in EMIR are cleared through authorised central counterparties.

In its current draft, ESMA state non-financial counterparties will not have to comply fully until early 2018.

As a final draft, the technical standards will now be passed onto the European Commission to be ratified.

This could take up to three months, with approval expected by January 2015.

ESMA said four types of swaps would be subject to central clearing, including basis swaps, fixed-to-float interest rate, forward-rate agreements and overnight index swaps.

Four categories of parties will be forced to comply over different time frames.

Alternative investment funds, classed as category 2, will be given 18 months after the Commission’s approval to begin centrally clearing swaps covered by the regulation.

In other news, the European Insurance and Occupational Pensions Authority (EIOPA) has published its work programme for 2015.

In a slight change in its approach, the supervisory authority said it restructured its strategy and would focus on five “strategic goals”.

EIOPA said it would ensure transparency and better standards for consumers, develop prudent regulations, improve the quality and consistency of supervisors, identify, mitigate and manage risks, and act as a modern and competent organisation.

Advising the European Commission on the solvency of IORPs was a high priority for the agency, taking up 0.85 of full-time equivalent staff, with delivery expected by Q4 2015.

It also said it would update its register of IORPs by the third quarter and implement stress tests for IORPs, also by the fourth quarter.

EIOPA said its 2015 regulations plan would help facilitate cross-border pension provision but added that other areas would depend on the progress of IOPR II.

However, it said it would prepare advice to give to the European Commission over additional EIOPA responsibilities.

The Authority is planning to provide the European Commission with advice on the IORP II floated idea around the pension benefit statement and the risk-evaluation for pensions.

This would also entail advice on remuneration policies and other areas as required. 

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