FIA responded today to the ESMA consultation paper on Draft technical advice on commercial terms for providing clearing services under EMIR (FRANDT). FIA and its members are fully supportive of the policy objective of FRANDT in addressing the clearing access difficulties faced by some counterparties. FIA’s response highlights a few areas of the ESMA’s proposal, which require further consideration and a change in approach to achieve a desired outcome, otherwise the FRANDT requirements may have a damaging effect on access to clearing and may hinder effective risk management by clearing firms, which is critical to ensuring the safety and soundness of the clearing eco-system.
FIA looks forward to engaging with ESMA and other stakeholders further to explore in more detail the recommendations put forward in the response.
ESMA is expected to publish a final report and submit the technical advice to the European Commission by the end of Q1 2020.