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A Lot of Pushing Back But Not Enough Pushing Forward
By Nik Venema | September 13, 2013

The European Securities and Markets Authority (ESMA) announced today the postponement, until November, of plans requiring OTC derivatives users to report their trades. The six-week delay is due to numerous insufficient applications. At least 7 trade repositories have applied for ESMA’s authorization including CME Group, the Depository Trust and Clearing Corporation, Ice and the Independent Trade Repository. interviewed Marcelle von Wendland, the interim chief executive of The Independent Trade Repository, and he maintains the fact that the initial guidelines set out under EMIR along with ESMA’s timeline was “more of a political goal rather than something that was realistic.”

ESMA has also outlined that the first authorizations of clearing houses under the new rules would not take place before October 15. Many exchange-backed services have started to emerge, which adds to the concern among regulators, including ESMA, of the threat of fragmented data between repositories and jurisdictions. This continues to illustrate how there is a lack of international harmonization between authorities across the globe. The fragmentation of data increases systemic risk, and threatens the core of the G20’s objectives.

ESMA has already pushed back the mandatory futures reporting to January 2015, and this delay adds to more of the same – there doesn’t seem to be any real confidence in the dates set by regulators and authorities. The latest delays can be seen as more proof that regulations need to be more carefully implemented. Regulatory reform shouldn’t just be based on rulings, but actual principles – principles that carry more weight through honest collaboration between governments and the industry.