The World Federation of Exchanges (WFE) welcomes the opportunity to comment on ESMA’s consultation on the draft RTS specifying margin transparency requirements under EMIR 3. In particular, we strongly welcome ESMA’s proposals on visibility and predictability of margin beyond the central counterparties’ (CCPs) sphere, i.e. from clearing members (CMs) to clients, and from clients to indirect clients. Our response outlines that the RTS should:
- Prioritise end-user usefulness, allowing operational flexibility
- Not include requirements in the RTS that are not compatible with EMIR Level 1 (e.g. sensitivity testing) and streamline requirements already provided for in other parts of the regulation (e.g. back-test requirements established by EMIR RTS Article 49)
- Remain aligned with BCBS-CPMI-IOSCO’s recommendations on margin transparency to maintain global consistency and avoid fragmentation; and
- Recognise that any technology development to support the new requirements will take time to implement and CCPs would benefit from a transition period of at least 12 months before the RTS becomes enforceable
