Futures Industry Association, Inc.
FIA
FIA is the leading global trade organization for futures, options and centrally cleared derivatives markets, supporting open, transparent and competitive markets.
Focus Areas
2023-2025
2020-2022
2015-2019
ID: 803137414612-21
Lobbying Activity
Meeting with John Berrigan (Director-General Financial Stability, Financial Services and Capital Markets Union) and
5 Dec 2025 · Reporting under Article 7d of EMIR (Regulation (EU) No 648/2012)
Meeting with Alexandra Jour-Schroeder (Deputy Director-General Financial Stability, Financial Services and Capital Markets Union)
18 Sept 2025 · Developments and perspectives on capital markets integration
FIA Urges Single Ruleset to End Cyber Regulation Overlap
20 Jun 2025
Message — The organization calls for a single ruleset where regulations overlap or share the same objectives. They argue that applying product-focused rules to financial services creates uncertainty and redundant incident reporting.123
Response to Savings and Investments Union
7 Mar 2025
FIA welcomes the Commissions SIU initiative as part of its competitiveness objectives, as well as ESMAs announcement on simplifying and reducing the reporting burden in the financial sector. Open, well-functioning and integrated EU capital markets are essential for the EU to further attract investments and deliver on todays pressing economic and societal needs. We believe opportunity exists to make EU markets more competitive, while striking the appropriate regulatory balance to maintain financial stability. The further development of the SIU requires many ingredients (see Annex for full recommendations) including promoting an open, competitive, pragmatic, predictable, safe, well-regulated and fair marketplace for domestic and international financial institutions alike. FIA believes these objectives can be met largely through fine-tuning existing regulations, rather than overhauling them, and by international dialogue with peer regulators and global standard setters to avoid a patchwork of conflicting or duplicative regulations that increases costs and disincentives investment. EU policymakers should continue to allow access to global markets for EU market participants. In the derivatives space, EU clearing firms need to have access and offer competitive access to their clients preferred CCP. At the same time, EU financial markets need to attract international participants. CCPs are critical inter-connectors in the financial system, acting as a buyer to every seller and a seller to every buyer. FIA strongly advocates for client access to CCPs as a cornerstone of resilient global derivatives markets. FIA clearing firm members contribute in a meaningful way to financial stability as key facilitators of the transition to central clearing for many derivatives products, a core objective of the G20 response to the 2008 GFC. Yet, clearing firms face several issues threatening to impact their ability to provide clearing to a growing customer base. Put clearly, the capacity to clear is under pressure. Several concerns need addressing so clearing firms have adequate capacity to provide robust clearing services in the EU. These concerns include capital constraints, access to CCPs, access to liquid and eligible collateral and margin transparency. Equivalence is a core principle of the regulatory framework overseeing the global nature of derivatives markets. FIA recommends the EU provide long-term certainty regarding outstanding CCP equivalence decisions to preserve financial stability and provide EU market participants with continued access to global pools of liquidity. Recommendations: Establish clear definitions of scope in EU legislation and early clarifications on territorial and personal scope Allow sufficient time for implementation of requirements before carrying out regulatory and legislative reviews and align compliance dates of L1 and L2 requirements Conduct public engagement with industry and independent experts on important Level 1/2/3 rules before publishing them. Avoid gold-plating L1 legislation. Provide meaningful and robust cost-benefit and impact analysis before proposing new requirements and add a competitiveness test as part of important policy proposals. Optimise CCP equivalence reviews and improve transparency on outstanding decisions on remaining jurisdictions. Establish appropriate capital requirements and reduce other restrictive measures to alleviate clearing capacity for intermediaries. Ensure the IFR regime for investment firms is proportionate to the risk these firms bring to their counterparties and the market as a whole. Ensure globally consistent margin requirements to enable clearing margin transparency. Retain the ancillary activities exemption to allow European companies to hedge their commercial risks, whilst safeguarding the transparency and integrity of commodity markets. Streamline reporting to remove duplication/unnecessary burden and ensure shared access to data.
Read full responseMeeting with Markus Ferber (Member of the European Parliament)
4 Feb 2025 · Savings and Investments Union and Capital Market Union
Meeting with Alexandra Jour-Schroeder (Deputy Director-General Financial Stability, Financial Services and Capital Markets Union) and
4 Feb 2025 · Capital Market Union, EMIR
Meeting with Maria Luís Albuquerque (Commissioner) and
3 Feb 2025 · Exchange with Futures Industry Association (FIA)Board
FIA Urges EU to Fine-Tune Capital Market Regulations
31 Jan 2025
Message — FIA suggests fine-tuning existing regulations, rather than overhauling them, to support the single market. They advocate for client access to global markets and clearer definitions in legislation. Finally, they request sufficient time for implementation of requirements before reviews occur.123
Impact — European regulators lose the power to implement stricter oversight through additional requirements.6
Meeting with Maria Raffaella Assetta (Head of Unit Financial Stability, Financial Services and Capital Markets Union) and Insurance Europe and
9 Jan 2025 · EU-UK Financial Regulatory Forum
Meeting with Stéphanie Yon-Courtin (Member of the European Parliament) and Bank of America Corporation and
11 Sept 2024 · Capital Markets Union
Meeting with John Berrigan (Director-General Financial Stability, Financial Services and Capital Markets Union)
22 May 2023 · EMIR 3.0, MiFID II Review
Response to Interservice consultation on the electricity market design reform - REMIT
16 May 2023
Dear Sirs, The co-signed associations FIA, FIA EPTA and ISDA appreciate the opportunity to comment on the European Commissions REMIT proposal. We support the recent changes to the original proposal made in the latest Council text dated 5th May but would like to highlight some additional concerns that remain. In particular, we recommend: 1. retaining the current definition of Person Professionally Arranging Transactions; 2. deleting the proposed changes to the third paragraph of Art. 2 and retaining the current definition in conjunction with ACER guidance when information is considered to be precise; 3. clarifying that the act of cancelling or amending an order shall not be automatically considered insider trading if there was a justifiable rationale for the cancellation; 4. removing the inclusion of algorithmic trading and DEA providers in REMIT; 5. deleting new articles 7a 7d and related recitals regarding the LNG benchmark regime; 6. retaining the current wording of Art. 9 (1) of REMIT and rejecting the amendment proposal; 7. We support the authorisation requirement for RRMs but recommend drawing parallels from the process for third-country firms under the Benchmark Regulation and EMIR; 8. deleting the newly introduced paragraphs in Art; 13, particularly proposed paragraphs 3-9; 9. replacing the terms client and investor with market participant and the term investment decision with trading decision. We further recommend defining when an order is considered pending and clarifying which benchmark is referred to; and 10. deleting Art. 16 (b). Please see the attached for further details regarding our positions. Kind regards FIA, FIA EPTA and ISDA
Read full responseFIA and partners urge EU to narrow benchmark regulation scope
29 Mar 2023
Message — The associations request that only systemically important benchmarks face mandatory compliance requirements. They call for an immediate extension of the transition period for non-EU benchmarks. Additionally, they want legacy transactions protected if a benchmark is later prohibited.123
Meeting with Florian Denis (Cabinet of Commissioner Mairead Mcguinness)
6 Mar 2023 · EMIR, MiFID Reviw, sustainable finance
FIA Warns Mandatory Active Accounts Harm EU Firm Competitiveness
24 Feb 2023
Message — The organization recommends removing proposed Pillar 2 prudential measures and opposes mandatory active accounts with quantitative thresholds. They request a detailed cost-benefit analysis and the exclusion of client-driven activities from these requirements.123
Why — This would prevent increased operational costs and maintain the ability to compete with non-EU banks.45
Meeting with Mairead McGuinness (Commissioner) and
21 Sept 2022 · Energy derivatives market
Meeting with Danuta Maria Hübner (Member of the European Parliament)
20 Sept 2022 · Meeting on EMIR Review
Response to Central securities depositories – review of EU rules
26 May 2022
The Futures Industry Association (FIA) and the International Swaps and Derivatives Association (ISDA) (together the Associations) welcome the opportunity to comment on the European Commission’s (EC) proposal to review the Central Securities Depositories Regulation (CSDR), in particular with respect to reforms of the mandatory buy-in regime (MBI) under Article 7 CSDR.
The primary concern of the Associations’ members remains the application of the MBI regime to margin transfers and the physical settlement of derivatives transactions which would lead to significant uncertainties and unintended adverse consequences, as well as the disruption of existing contractual default provisions in ways parties did not contemplate when they entered into the agreement, all as described in previous publications, consultation responses and case-studies of the Associations.
Executive Summary:
• The EC’s suggested two step approach allows for a more targeted application of MBI. Technical changes to the SDR are also welcomed by the Associations.
• The application of MBI provisions to margin transfers would have a negative effect on the settlement practices of margin transfers and undermine the objectives of CSDR and EMIR.
• With respect to physically settled derivatives, MBI provisions would be disproportionate and implementation efforts outweigh any potential benefits.
• The review of CSDR should provide legal clarity that derivatives transactions and collateral relating to derivatives transaction are not in scope of the MBI provisions.
Our full response is available in the attachment.
Read full response23 Feb 2022
FIA is the leading global trade organization for the futures, options and centrally cleared derivatives markets, with offices in Brussels, London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from about 50 countries as well as technology vendors, law firms and other professional service providers.
FIA’s mission is to:
• support open, transparent and competitive markets,
• protect and enhance the integrity of the financial system, and
• promote high standards of professional conduct.
As the principal members of derivatives clearinghouses worldwide, FIA's clearing firm members play a critical role in the reduction of systemic risk in global financial markets.
FIA welcomes the opportunity to provide feedback on the proposed changes to the EU’s Capital Requirements Regulation (CRR). Our response focuses on a narrow issue, which may have material negative ramifications for the institutions subject to CRR that provide derivatives client clearing services, namely the proposed new segregation condition for recognition of initial margin (IM) offset when calculating leverage ratio exposure value. We have set out our comments on and solution to the proposed changes to CRR Article 429c in the attached letter.
Read full responseMeeting with Andrea Beltramello (Cabinet of Executive Vice-President Valdis Dombrovskis) and Federation of European Securities Exchanges and Banking Payments Federation Ireland
11 Jan 2022 · Investment Firms prudential framework
Meeting with Tommy De Temmerman (Cabinet of Commissioner Mairead Mcguinness) and Federation of European Securities Exchanges and
11 Jan 2022 · Investment Firms prudential framework
Response to Delegated Act on the Ancillary Activity Exemption
24 Jun 2021
Dear Sirs
Please find attached the response by FIA on behalf of our members, we are supportive of the draft Delegated Act.
Kind regards
Christiane
Read full response20 May 2021
FIA welcomes the opportunity to provide feedback on the European Commission’s (EC) published Draft Implementing Regulation on the extension of transitional period related to own funds requirements for exposure to CCPs in the Capital Requirements Regulation (CRR). We support the extension for the reasons below.
The EC’s continued efforts regarding the equivalence assessment of the legal and supervisory framework of third-country CCPs (TC-CCPs), which is a prerequisite for recognition of such CCPs by the European Securities and Markets Authority (ESMA), continues to be of vital importance for market participants. The combination of a lack of third-country CCP recognition and the expiry of the transitional provisions related to own funds for exposures to CCPs in the CRR, would severely impact European firms acting on a cross-border basis as EU banks and investment firms would not be able to continue to apply qualifying CCP (QCCP) capital treatment to CCPs not recognised by ESMA. This would result in a significant increase in risk-weighted assets (RWA) and capital requirements for EU banks, compared to non-EU banks, due to the significantly more stringent treatment of default fund exposures for non-QCCPs. Such concerns remain extremely problematic for EU firms in relation to their continued access to clearing services for EU domiciled clients on TC-CCPs, which are yet to be recognised under EMIR Article 25.
QCCP status is also important for investment firms subject to the Investment Firms Regulation (IFR) that starts to apply on 26 June 2021, especially if they wish to calculate K-CMG (see IFR Article 23(1)(b)) and/or are subject to K-TCD (see IFR Article 25(1)).
Whilst we recognise the ongoing efforts by the EC to deliver positive equivalence determinations for jurisdictions where third-country CCPs, which provide services to EU firms, are established we believe that extending the transitional provisions under CRR until 28 June 2022 is critical and proportionate in order to avoid disruption to international financial markets. The 12-month extension of the QCPP transitional period is key to ensuring continuous access to these markets and global competitiveness of EU banks and impacted investment firms. As FIA members engage in cross-border transactions in derivatives markets, we therefore recognise the need to achieve a regulatory level playing field across multiple jurisdictions. It will also give ESMA additional time to complete outstanding applications for recognition of TC-CCPs.
We encourage the EC to take into consideration the considerable time it requires to complete the CCP recognition process under EMIR Article 25 for outstanding applications. Since September 2013, of the TC-CCPs that have applied for recognition under EMIR Article 25, ESMA has processed and recognised a total of 38 CCP applications established in the jurisdictions corresponding to the countries covered by equivalence decisions. It is therefore clear that whilst the efforts on all sides are continuing, more time needs to be given to ESMA to manage the outstanding applications of TC-CCPs.
Thank you for considering FIA’s response to the EC’s feedback request. We welcome any questions you may have regarding our position.
***
FIA is the leading global trade organization for the futures, options and centrally cleared derivatives markets, with offices in Brussels, London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from about 50 countries as well as technology vendors, law firms and other professional service providers.
FIA’s mission is to:
• support open, transparent and competitive markets,
• protect and enhance the integrity of the financial system, and
• promote high standards of professional conduct.
As the principal members of derivatives clearinghouses worldwide, FIA's clearing firm members play a critical role in the reduction of system
Read full response7 Apr 2021
FIA and ISDA (the Associations) welcome the opportunity to respond to the European Commission’s draft Delegated Regulation supplementing Regulation (EU) No 648/2012 by specifying the conditions under which the commercial terms for clearing services for OTC derivatives are to be considered to be fair, reasonable, non-discriminatory and transparent and the draft Annex. The Associations would like to thank the European Commission (EC) for considering previous feedback on the ESMA Final Report on FRANDT and for making pragmatic changes and refinements in a number of important areas of FRANDT, which will make the requirements more proportionate.
As mentioned previously, the Associations and their members support fair, reasonable, non-discriminatory and transparent commercial terms for clients and continue to support the policy objective of FRANDT in addressing the clearing access difficulties faced by counterparties with limited OTC derivatives trading activity.
While we appreciate the EC’s general approach, the Associations’ clearing service provider (CSP) members remain concerned about some critical issues that we would like to bring to the EC’s attention for further consideration before the FRANDT rules are finalised. We have set them out in Section II of the attached document and they cover the following areas:
- Territorial scope;
- Application of FRANDT to new/prospective clients only;
- Implementation period; and
- Refusal of clearing orders, suspension, liquidation or close out of client positions and notice periods.
In Section III, we have also provided some further commentary on the specific requirements that are set out in the Annex to the draft Delegated Act.
We hope you find the comments in this response helpful when finalising the FRANDT rules. Although we recognise that we are approaching the end of the legislative process on this important matter, we would be happy to discuss any of the points in our response.
Read full responseResponse to Central securities depositories – review of EU rules
4 Apr 2021
ISDA and FIA (the ‘Associations’) welcome the opportunity to provide feedback to the European Commission’s (EC) consultation on the CSDR inception impact assessment (Roadmap). The Associations welcome the opportunity to provide their views to the EC on revising the CSDR framework, especially regarding the scope of the mandatory buy-in requirements as part of the Settlement Discipline Regime (SDR). In line with our response to the EC’s targeted consultation on the review of CSDR, we would like to reiterate the Associations members’ primary concern with the SDR, which is the application of the mandatory buy-in requirements to derivatives transactions. In this context, we appreciate the EC’s reference to stakeholders’ concerns that ‘the scope of that framework cast doubts on the clarity of the current rules as well as their potential impact outside the sphere of securities trading and settlement.’. However, the Associations’ members believe that reforming the SDR regime, in particular the buy-in rules, should be the main priority in the upcoming review process. Furthermore, we remain concerned about the application date of the SDR in February 2022 given that the legislative proposal is expected to be published in Q4 2021, hence revised CSDR will not be in place prior to the current implementation date. In this respect, the Associations’ members request that the EC indicates its intention with respect to amendments and clarifications to the SDR buy-in rules as soon as possible and well in advance of unveiling the legislative proposal, giving market participants the opportunity to plan for SDR implementation. It is critical that the SDR mandatory buy-in regime is amended, clarified, and improved before any further implementation efforts are made by market participants on the basis of the current regime. A summary of our position is set out in the attached document.
Although the Associations support the EC’s objective “to ensure that the objectives of CSDR - to promote safe, efficient and smooth settlement by laying down uniform requirements for the settlement of financial instruments in the Union and rules on the organisation and conduct of CSDs – are met in a more proportionate, effective and efficient manner”, we are of the view that the SDR mandatory buy-in regime, as it applies to margin transfers and physically settled derivatives, does not contribute to the objective above and that market participants have already put in place other measures that prevent and remedy settlement fails. A summary of our position is set out in the attached document.
Read full responseMeeting with Mairead McGuinness (Commissioner)
16 Mar 2021 · Markets, Innovation and financial sustainability
Meeting with Mairead McGuinness (Commissioner)
1 Feb 2021 · Discussion on future relation with the Uk, equivalence decisions with the UK (equivalence under EMIR Art. 2a and derivative trading obligation), EMIR 2.2 and ESMA CCP Supervisory Committee.
Meeting with Florian Denis (Cabinet of Commissioner Mairead Mcguinness)
7 Dec 2020 · MiFID II
Meeting with John Berrigan (Director-General Financial Stability, Financial Services and Capital Markets Union)
21 Oct 2020 · UK CCPs
9 Jul 2020
FIA and ISDA welcome the opportunity to provide feedback on the Commission Draft Delegated Act on comparable compliance under Article 25a of EMIR 2.2 and commend the Commission for arriving at a balanced approach regarding the required assessments of third-country clearing houses (TC-CCPs) requests for comparable compliance and the modalities and conditions of that assessment. Firstly, we congratulate and applaud the Commission for formulating a pragmatic and clear approach in the proposed DAs. We recognise and thank the Commission for taking into account many of our comments to ESMA’s Technical Advice. Consequently, our comments mostly represent requests for clarification:
- Article 1 sets out the procedure for a Tier 2- TC-CCP to request comparable compliance and we are comfortable with the approach taken by the Commission. We recommend providing further clarity and align the timeline for a Tier-2 TC-CCP to prepare its request to ESMA for comparable compliance with ESMA’s timeframe for assessment of comparable compliance and allow TC-CCPs to submit its request within a 90-working day timeframe. The preparation of a comparable compliance request is a time-consuming exercise and additional time will ensure that TC-CCPs will have sufficient time to prepare such requests with the appropriate care.
- Overall, we recommend the Commission to provide more clarity regarding Articles 3 and 4, as well as related Annexes I and II, as it remains unclear how a holistic, outcomes-based approach to the comparable compliance approach would be taken in practice. In particular, the language under Articles 3 and 4 that states that comparable compliance is found where “the Tier 2 CCP complies with all relevant elements set out in” Annexes I and II. The elements outlined under the related Annexes are fairly granular and would effectively require a Tier 2 CCP to comply with requirements other than those defined under its local regulatory framework and given the structure of the Annexes, it could still be interpreted in a way that compliance should be assessed on a requirement-by-requirement basis, which appears to be contrary to the intention of what the DA wants to achieve. The Commission seems clear in its explanatory notes to the proposed DAs that a Tier 2 CCP will not have to apply an EMIR requirement as a minimum floor where the corresponding requirement in the third country is not identical to allow comparable compliance with respect to that requirement. Consequently, in addition to clearly recognizing the equivalence decision, we recommend to revise Articles 3 and 4 to state that: “the Tier 2 CCP complies with local laws and regulations that are comparable to all relevant elements set out in Annex [I/II] on a holistic, outcomes-basis.”
- We are supportive of the specific conditions for the assessment as set out in Article 5 and Article 5(1) provides that ESMA shall not refuse comparable compliance on grounds that the third-country framework makes it impossible for the TC-CCP to comply with the relevant EMIR requirements. Article 5(2) sets out the specific requirements which the TC-CCP must satisfy. We recommend adding to the requirements in Article 5(2)(a) a reference to "acting in a manner or establishing rules or processes that would be unenforceable under third-country laws”. This would provide legal clarity and certainty for clearing participants and TC-CCPs alike and will assist with any potential conflicts of laws issues.
- We do believe that both tiering and comparable compliance assessments could result in significant overlap in information required to be submitted by TC-CCPs and in order to further reduce burden and compliance costs we would recommend that were relevant information is submitted for the recognition process it should not be required to be resubmitted under Comparable Compliance assessment should a TC-CCP chooses to apply for.
- Please find enclosed position letter providing details of all aspects of our response
Read full responseResponse to Systemic importance of third-country central counterparties
9 Jul 2020
FIA and ISDA welcome the opportunity to provide feedback on the Commission Draft Delegated Act on criteria for tiering under Article 25(2a) of EMIR 2.2 (“DA”) and commend the Commission for arriving at a balanced approach when it comes to classifying a third-country clearing house (“TC-CCPs”) as systemically important, or likely to become systemically important. Firstly, we congratulate and applaud the Commission for formulating a pragmatic and clear approach in the proposed DAs. The Commission has taken many of our comments to ESMA’s Technical Advice into account. The DA provides for: (I) A greater level of predictability for TC-CCPs; (II) Quantitative thresholds for an initial determination of whether a CCP falls under the Tier-1 category or might require further analysis and may be determined to be a Tier-2 CCP; (III) A streamlined two-step process that will reduce the effort to provide and analyse data; and (iv) A clearer focus on an EU nexus of criteria. Consequently, our comments mostly represent requests for clarification in the following areas:
- We recommend the Commission to exclude pound sterling procedurally from ESMA’s overall assessments in accordance with the final Delegated Acts and especially concerning the threshold calculations at Article 6 of the DA Tiering. Excluding pound sterling would lead to a more appropriate assessment when determining a TC-CCP’s systemic importance for the financial stability of the EU or one or more of its Member States.
- When calculating the maximum open interest (Article 6(a)) or the maximum notional outstanding (Article 6(b)), it would be important to clarify whether those figures should be adjusted or not for market sensitivities such as delta (for options) and duration (for interest rate derivatives). In other EU regulations (e.g. 575/2013) such adjustments are made explicitly, and we recommend the Commission to follow the same approach when finalising the Delegated Acts.
- While it is implicit that the Commission in Article 6(c) refers to Initial Margin payments and that it is not intended to include Variation Margin payments, we recommend clarifying the language in the final DA Tiering.
- We assume that the calculation of the average aggregated margin requirements and default fund contribution will exclude pound sterling for the entire 2 year look back period in light of the United Kingdom’s withdrawal from the European Union and final clarification would be helpful (Article 6(c)).
- When calculating the default fund contributions as required by the CCP, it would be important to clarify whether the intention is to use required or held figures in the default fund contributions (Article 6(c)). This would make the text compatible with Article 2(1)(c).
- In addition, further clarity may be required for ESMA on whether in relation to TC-CCPs any UK entities should be excluded from the calculation of these thresholds (as UK Clearing Member entities count towards the calculation until 31 January 2020). More clarity would also be required in the unlikely event, as it currently stands, of the current transition being extended beyond 31 December 2020.
- In addition, when calculating the average margin requirements and default fund contributions as per Article 6(c), we request that clearing members have to only take into account the house positions and payments linked to EU client clearing activities and not all client activity and it would be beneficial to clarify the language in the final DA Tiering.
- We suggest that further clarity is provided on the meaning of “payment obligation committed by entities” in terms of the method of calculation and the exact information to be included as required by Article 6(d). Please find enclosed position letter providing details of all aspects of our response.
Read full responseMeeting with Andrea Beltramello (Cabinet of Executive Vice-President Valdis Dombrovskis)
21 Nov 2019 · European Market Infrastructure Regulation
Meeting with Jan Ceyssens (Cabinet of Vice-President Valdis Dombrovskis)
26 Sept 2018 · EMIR - Brexit
Response to Extension of transitional period on own funds requirements for exposures to central counterparties
11 May 2018
FIA welcomes the opportunity to provide feedback on the European Commission’s (EC) published Draft Implementing Regulation on the extension of transitional period related to own funds requirements for exposure to CCPs in the Capital Requirements Regulation (CRR). We support the extension for the reasons below.
The EC’s continued efforts regarding the equivalence assessment of the legal and supervisory framework of other third-country CCPs, which is a prerequisite for recognition of such CCPs by the European Securities and Markets Authority (ESMA), continues to be of vital importance for market participants. The combination of a lack of third-country CCP recognition and the expiry of the transitional provisions related to own funds for exposures to CCPs in the CRR, would severely impact European firms acting on a cross-border basis as EU banks and investment firms would not be able to continue to apply qualifying CCP (QCCP) capital treatment to CCPs not recognised by ESMA. This would result in a significant increase in risk-weighted assets (RWA) and capital requirements for EU banks, compared to non EU banks, due to the significantly more stringent treatment of default fund exposures for non-QCCPs. Such concerns remain extremely problematic for EU firms in relation to their continued access to clearing services for EU domiciled clients on third-country CCPs, which are yet to be recognised under EMIR Article 25.
As stated in previous correspondence with the EC in the context of the implementation of Article 25 of EMIR, as our members engage in cross-border transactions in derivatives markets, we recognise the need to achieve a regulatory level playing field across multiple jurisdictions.
Whilst we recognise the ongoing efforts by the EC to deliver positive equivalence determinations for jurisdictions where third-country CCPs, which provide services to EU firms, are established, we believe that extending the transitional provisions under the CRR is critical to ensure continuous access to these markets whilst outstanding equivalence decisions are made, noting also the still outstanding equivalence determinations for the Securities and Exchange Commission (SEC) regime and the significant impact it will have on EU Banks and EU domiciled clients if US Equity Derivative markets can no longer be accessed.
We encourage the EC to take into consideration the considerable time it requires to complete the CCP recognition process under EMIR Art 25. Since September 2013, of the 45 third-country CCPs that have applied for recognition under EMIR Art 25, ESMA has processed and recognised a total of 32 CCP applications established in the jurisdictions corresponding to the countries covered by equivalence decisions. It is therefore clear that whilst the efforts on all sides are continuing, more time needs to be given to ESMA to manage the outstanding applications of third-country CCPs.
Thank you for considering FIA’s response to the EC’s feedback request. We welcome any questions you may have regarding our position.
***
FIA is the leading global trade organisation for the futures, options and centrally cleared derivatives markets, with offices in London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from more than 48
countries as well as technology vendors, lawyers and other professionals serving the industry. FIA’s mission is to support open, transparent and competitive markets, protect and enhance the integrity of the financial system, and promote high standards of professional conduct.
Read full responseResponse to Review of the appropriate prudential treatment for investment firms
8 Mar 2018
FIA is the leading global trade organization for the futures, options and centrally cleared derivatives markets, with offices in London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from more than 48 countries as well as technology vendors, lawyers and other professionals serving the industry. FIA’s mission is to support open, transparent and competitive markets, protect and enhance the integrity of the financial system, and promote high standards of professional conduct. As the principal members of derivatives clearinghouses worldwide, FIA’s member firms play a critical role in the reduction of systemic risk in global financial markets.
The European Commission’s intention is to create a prudential regime better suited to investment firms as an alternative to CRR / CRD IV, which had been geared towards credit institutions. FIA members welcome the legislative proposals and support the idea of a calibrated regime taking into account the business of investment firms. However, FIA members have raised a number of concerns regarding the proposals as follows:
• Risk to Market (RtM) – K-CMG
FIA members’ key concerns relate to Article 21 and Article 23.
Article 21 - FIA recommends that the language of Article 21 be redrafted to (i) align with recitals (20) and (24) and (ii) make clear that rather than investment firms having to apply the "higher of" K-NPR and K-CMG, the requirement is that when calculating RtM, investment firms must apply K-NPR under Article 22, unless they have been permitted by their competent authority to apply K-CMG under Article 23.
Article 23 - FIA recommends that the proposed Article 23(1)(d) (which limits the availability of K-CMG to those investment firms whose clearing member is a credit institution) is deleted. Otherwise, such differentiation in capital treatment (based upon whether or not the clearing member is a credit institution) would likely result in several non-credit institution clearing members ceasing to provide client clearing services and/or relocating their business outside of the EU. Each such outcome would have a very negative impact on an area of great concern to the European Commission – namely, it would further reduce access to clearing, reduce competition between clearing members, result in clearing being concentrated in a smaller number of firms and could potentially result in investment firms reducing the amount of hedging that they conduct via cleared derivatives, thereby increasing systemic risk.
• Own Funds requirements
Article 9 in Part 2 of the proposed Regulation - FIA recommends that investment firms should be permitted to hold evergreen subordinated debt, with the provision that it can only be repaid if the resulting capital surplus is above a certain threshold.
• Risk to Market – K-NPR
Article 22 of the proposed Regulation - FIA recommends that more time is spent considering these provisions and that consideration be given to the development of some form of FRTB “lite” regime in the intervening five years.
• Risk to Firm – K-TCD
Article 26 of the proposed Regulation – FIA requests clarification of the rationale for the application of an 18% supervisory factor for commodities and encourage further analysis before committing a specific percentage to primary legislation.
Article 30 of the proposed Regulation - FIA recommends adding highly liquid commodities (e.g. LME warrants) as eligible collateral to Table 4 of Article 30 of the proposed Regulation.
• Concentration Risk – K-CON
Article 36 of the proposed Regulation – FIA believes that the reference to “regulatory capital” is a typographical error and should be replaced with a reference to “own funds”.
• Liquidity requirement
Article 42 of the proposed Regulation - FIA recommends that the Commission considers assets in addition to cash and those in Articles 10 to 13 of Commission Delegated Regulation (EU) 2015/61.
Read full responseResponse to Review of the European Supervisory Authorities
23 Jan 2018
FIA and ISDA (together the Associations) welcome the opportunity to provide feedback on the European Commission’s proposals on the operations of the ESAs and the proposed supervisory framework:
1. The governance structure should provide for independent, objective supervisors accountable to legislators but operationally independent. It is important to recognise the very different nature of capital market supervision (which tends to be varied by product and participant, as well as global in nature) versus bank supervision (which typically involves more similar institutions doing a smaller set of activities which are often more locally oriented) and ensure an appropriately differentiated policy approach at each ESA. Supervisory convergence should be the primary focus of the ESAs;
2. We welcome the introduction of an independent Executive Board with full-time members replacing the current Management Board but recommend that further clarification should be provided regarding the role of the full-time members of the Executive Board in the management of the ESAs. We agree that the Board of Supervisors should continue to be the main decision-making body of the ESAs;
3. We recommend further clarifications as to how the proposed Executive Board would work with the proposed CCP Executive Session on the authorisation of CCPs (EMIR Part 2.2);
4. We recommend that ESMA and NCAs take a differentiated approach to supervision with regards to wholesale and retail customers;
5. Given the need to increase resources of the ESAs, we accept a funding system partly funded by the industry, subject to a dedicated industry consultation and within certain parameters. There is a need for fees and contributions to be commensurate as a reasonable level of fees will ensure that the provisions of financial services remains cost effective and that the competitiveness of the EU market place is not affected. Further clarification is required on the collection mechanism;
6. Fees should be fairly allocated across the regulated population. It would be inappropriate to carve-out specific categories of entities just because they are smaller in size than the largest financial institutions. We recognise that proportionality should be at the heart of the allocation;
7. We recommend increased engagement between the ESAs and the industry and support the creation of a more robust consultation culture within creased transparency around policy decisions;
8. New powers for the ESAs: any consideration to expand ESMA’s direct supervisory powers should respect the subsidiarity principle according to Article 5 of the Treaty of the European Union and would first require in-depth assessment, including corresponding cost/benefit analysis and ideally also preceding consultation of concerned entities. In this context, the value of supervision by national authorities should be recognised, given their strong knowledge of local markets, with their particularities (specific products, client base, and tax regimes), best practices and national legal frameworks. National supervisors also have the best understanding of practical operations and business models of supervised entities and have established networks of coordination between regulators;
9. Regulatory forbearance: the ESAs should be provided with powers to temporarily suspend the application of certain regulatory requirements in certain circumstances and within a reasonable timeframe - effectively relieving firms from enforcement action during that time period;
12. Reform of the Q&A process: we support the proposal that the ESAs should conduct public consultations on guidelines and recommendations, and believe this should extend to Q&As; and
13. We support ESMA supervision for pan-European crucial IBOR benchmarks (i.e. Euribor, Eonia, which have already been determined critical by the Commission). National competent authorities should retain the supervisory authority over Benchmarks at a national level.
Read full responseResponse to Extension of the transitional periods on capital requirements for exposures to central counterparties
21 Nov 2017
FIA welcomes the opportunity to provide feedback on the European Commission’s (EC) published Draft Implementing Regulation on the extension of transitional period related to own funds requirements for exposure to CCPs in the Capital Requirements Regulation (CRR). We support the extension for the reasons below.
The EC’s continued efforts regarding the equivalence assessment of the legal and supervisory framework of other third-country CCPs, which is a prerequisite for recognition of such CCPs by the European Securities and Markets Authority (ESMA), continues to be of vital importance for market participants. The combination of a lack of third-country CCP recognition and the expiry of the transitional provisions related to own funds for exposures to CCPs in the CRR, would severely impact European firms acting on a cross-border basis as EU banks and investment firms would not be able to continue to apply qualifying CCP (QCCP) capital treatment to CCPs not recognised by ESMA. This would result in a significant increase in risk-weighted assets (RWA) and capital requirements for EU banks, compared to non EU banks, due to the significantly more stringent treatment of default fund exposures for non-QCCPs. Such concerns remain extremely problematic for EU firms’ in relation to their continued access to clearing services for EU domiciled clients on third-country CCPs, which are yet to be recognised under EMIR Article 25.
As stated in previous correspondence with the EC in the context of the implementation of Article 25 of EMIR, as our members engage in cross-border transactions in derivatives markets, we recognise the need to achieve a regulatory level playing field across multiple jurisdictions.
Whilst we recognise the ongoing efforts by the EC to deliver positive equivalence determinations for jurisdictions where third-country CCPs, which provide services to EU firms, are established we believe that extending the transitional provisions under the CRR is critical to ensure continuous access to these markets whilst outstanding equivalence decisions are made, noting also the still outstanding equivalence determinations for the Securities and Exchange Commission (SEC) regime and the significant impact it will have on EU Banks and EU domiciled clients if US Equity Derivative markets can no longer be accessed.
We encourage the EC to take into consideration the considerable time it requires to complete the CCP recognition process under EMIR Art 25. Since September 2013, of the 45 third-country CCPs that have applied for recognition under EMIR Art 25, ESMA has processed and recognised a total of 29 CCP applications established in the jurisdictions corresponding to the countries covered by equivalence decisions. It is therefore clear that whilst the efforts on all sides are continuing, more time needs to be given to ESMA to manage the outstanding applications of third-country CCPs.
Thank you for considering FIA’s response to the EC’s feedback request. We welcome any questions you may have regarding our position.
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FIA is the leading global trade organisation for the futures, options and centrally cleared derivatives markets, with offices in London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from more than 48
countries as well as technology vendors, lawyers and other professionals serving the industry. FIA’s mission is to support open, transparent and competitive markets, protect and enhance the integrity of the financial system, and promote high standards of professional conduct.
Read full responseMeeting with Elina Melngaile (Cabinet of Vice-President Valdis Dombrovskis), Jan Ceyssens (Cabinet of Vice-President Valdis Dombrovskis), Tatyana Panova (Cabinet of Vice-President Valdis Dombrovskis)
28 Sept 2017 · EMIR review; CCP Recovery & Resolution; MiFID
Response to Further amendments to the European Market Infrastructure Regulation (EMIR)
7 Sept 2017
FIA supports the European Commission's commitment to ensuring that third-country CCPs are appropriately supervised as part of a well-regulated central clearing system.
We set out below a number of positive recommendations to further enhance the changes proposed by the Commission with respect to the CCP equivalence and recognition process under EMIR. The full list of FIA's 23 recommendations is contained at the end of our attached response.
Forced Relocation
FIA considers that the most proportionate way to (i) address the legitimate concerns of the EU, the ECB and others regarding the clearing of derivatives through the most systemic third-country CCP Services; and (ii) ensure the EU has adequate oversight thereof, is for such systemic third-country CCP Services to be subject to the application of EMIR standards and to direct supervision by ESMA with the ability for ESMA to grant comparable compliance, rather than force the relocation of such activities deemed to be of substantial systemic importance for EU financial stability.
Recognition at the level of a CCP Service or Product
FIA recommends that the proposal be clarified to state that recognition can be granted at a CCP service or product level where appropriate, rather than the entire CCP legal entity. Not all CCP services or products within a single CCP legal entity will be systemically relevant to the European Union nor have the same impact on financial stability in the European Union.
Use of comparable compliance
FIA recommends that the oversight process for Tier 2 CCPs be streamlined and made more proportionate to the systemic importance of the CCP. This could be achieved by the European Commission and ESMA adopting the presumption that comparable compliance should be available in all third countries where the Commission has adopted an equivalence decision and that decision is still in effect. ESMA should give due consideration and deference to existing equivalence decisions, so as to limit the scope for market uncertainty and disruption. ESMA could also be given further tools to enable it to adjust its supervisory intensity accordingly.
ESMA role as a joint supervisor of third-country CCPs and the determinant of any conditions to recognition
The European Central Bank (ECB) and non-Eurozone EU central banks have valid and legitimate desires to ensure that the EMIR third-country CCP regime is appropriately calibrated and operated in order to meet their responsibilities and achieve the objectives of the European System of Central Banks. In order to avoid duplicative or conflicting requirements being created by those central banks or those central banks becoming quasi-regulators in addition to ESMA, FIA recommends that those central banks should feed into ESMA’s processes for granting recognition and overseeing third-country CCPs on an on-going basis, rather than directly imposing additional requirements or conditions outside of ESMA’s processes. ESMA should jointly supervise the most systemic of third-country CCPs in coordination and collaboration with the national competent authorities in that third-country.
Transitional arrangements
FIA recommends that the transitional arrangements be further improved, so that CCPs, their members and clients have sufficient time to transition to new regulatory and supervisory arrangements in a timely and orderly manner.
The need for enhanced transparency in ESMA processes
FIA encourages further enhancement of the transparency of the equivalence and recognition process. This could be achieved by ESMA engaging in public consultations before declaring a CCP or CCP service as “Tier 2” or determining to not recognise it and by making ESMA’s annual report to the Commission on third-country regulatory developments publicly available.
Read full responseResponse to EMIR Amendment
18 Jul 2017
FIA (“FIA”) welcomes the European Commission’s proposals and sets out below its comments on the European Market Infrastructure Regulation (EMIR) Review proposal Part 1 of the REFIT proposals. Many of the Commission’s proposed measures reflect FIA’s previous input in the Commission’s consultations on the EMIR review and the “Call for Evidence”.
Executive Summary
• Reporting of exchange traded derivatives (ETDs). FIA encourages the Commission to clarify:
- will the clearing member-to-client trade still be reportable?
- if it is still reportable, does the CCP have to report both the CCP-to-clearing member trade and the clearing member-to-client trade?
- what, if any, are the ongoing obligations of the clearing member and/or client to check the accuracy of the data that has been reported on their behalf by the CCP?
- do the reporting requirements apply to trades cleared through a third-country CCP?
• Proposed amendments to Article 39 (bankruptcy remoteness provision). FIA recommends that:
- the proposal be extended to address indirect clearing arrangements: direct clients providing indirect clearing services should also be required to hold client collateral on a bankruptcy remote basis and the proposals should clarify how clearing members (CMs) should treat the assets and positions of their clients in the event of a client default (when their direct clients are providing clearing services to indirect clients);
- the proposal should not cover the situation of a CCP default. CCP resilience, recovery and resolution should be solely addressed in a separate EU regulation;
- EU authorities obtain one or more independent, reasoned, external legal opinions confirming the legal effectiveness of the proposed drafting under EU and national insolvency laws - further consideration should also be given to existing national EU member state insolvency frameworks (e.g. UK’s Part VII of the Companies Act 1989, Articles L.440-7 to L.440-9 of the French code monétaire et financier, or Article 102b of the German Introductory Act to the Insolvency Statute). FIA is concerned that, as drafted, the current proposals are not legally effective.
• Proposed amendments to Article 4 (FRAND).
- In principle, FIA agrees with the objective of CMs offering clearing services on fair, reasonable and non-discriminatory terms (FRAND).
- However, FRAND requirements will not of themselves promote better access to clearing –rather it is economic, commercial and risk considerations that restrict a potential client’s access to clearing.
- Further clarity is required:
o on the interaction between FRAND under EMIR and other conflicting EU regulation such as MiFID II (that requires clearing services to be provided on “reasonable commercial terms” and for clearing members to “publish the conditions under which it offers clearing services”, etc.);
o on the meaning of FRAND requirements, especially the words “non-discriminatory”; and
o on the geographical (EU only?) and product scope (OTC derivatives clearing, but not exchange-traded derivatives) of the FRAND requirements;
- FRAND requirements should:
o not result in a mandatory obligation on clearing brokers to offer a clearing service to all potential clients or on mandatory terms but should enable them to offer a clearing service in a competitive, commercial and prudent risk-mitigating manner; and
o be set out at Level 1.
• Suspension of the clearing obligation. An effective, timely and transparent process is required and the consequences of suspension should be spelt out.
• Removal of frontloading and backloading requirements. FIA supports the removal of these requirements.
• CCP transparency. FIA welcomes the Commission’s proposal in relation to the CCP transparency requirements on their initial margin models and suggests a number of further enhancements – our response is aligned with ISDA’s on this topic and encourages further alignment with the new
Read full responseResponse to Extension of transitional period for CCPs
15 Nov 2016
FIA and GFMA welcome the opportunity to provide feedback on the European Commission’s (EC) published Draft Implementing Regulation on the extension of transitional period related to own funds requirements for exposure to CCPs in the Capital Requirements Regulation (CRR). We support the extension for the reasons below.
The EC’s continued efforts regarding the equivalence assessment of the legal and supervisory framework of other third-country CCPs, which is a prerequisite for recognition of such CCPs by the European Securities and Markets Authority (ESMA), continues to be of vital importance for market participants. The combination of a lack of third-country CCP recognition and the expiry of the transitional provisions related to own funds for exposures to CCPs in the CRR, would severely impact European firms acting on a cross-border basis as EU banks and investment firms would not be able to continue to apply qualifying CCP (QCCP) capital treatment to CCPs not recognised by ESMA. This would result in a significant increase in risk-weighted assets (RWA) and capital requirements for EU banks, compared to non EU banks, due to the significantly more stringent treatment of default fund exposures for non-QCCPs. Such concerns remain extremely problematic for EU firms’ in relation to their continued access to clearing services for EU domiciled clients on third-country CCPs, which are yet to be recognised under EMIR Article 25.
As stated in previous correspondence with the EC in the context of the implementation of Article 25 of EMIR, as our members engage in cross-border transactions in derivatives markets, we recognise the need to achieve a regulatory level playing field across multiple jurisdictions.
Whilst we recognise the ongoing efforts by the EC to deliver positive equivalence determinations for jurisdictions where third-country CCPs, which provide services to EU firms, are established we believe that extending the transitional provisions under the CRR is critical to ensure continuous access to these markets whilst outstanding equivalence decisions are made.
We encourage the EC to take into consideration recent statements made by ESMA’s chair Stephen Maijoor at the ECON hearing on 23 September 2016 and the considerable time it requires to complete the CCP recognition process under EMIR Art 25. Since September 2013, of the 45 third-country CCPs that have applied for recognition under EMIR Art 25, ESMA has processed and recognised a total of 19 CCP applications established in the jurisdictions corresponding to the countries covered by equivalence decisions. It is therefore clear that whilst the efforts on all sides are continuing, more time needs to be given to ESMA to manage the outstanding applications of third-country CCPs.
Thank you for considering FIA’s and GFMA’s response to the EC’s feedback request. We welcome any questions you may have regarding our position.
***
FIA is the leading global trade organisation for the futures, options and centrally cleared derivatives markets, with offices in London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from more than 48 countries as well as technology vendors, lawyers and other professionals serving the industry. FIA’s mission is to support open, transparent and competitive markets, protect and enhance the integrity of the financial system, and promote high standards of professional conduct.
The Global Financial Markets Association (GFMA) brings together three of the world’s leading financial trade associations to address the increasingly important global regulatory agenda and to promote coordinated advocacy efforts. The Association for Financial Markets in Europe (AFME) in London and Brussels, the Asia Securities Industry & Financial Markets Association (ASIFMA) in Hong Kong and the Securities Industry and Financial Markets Association (SIFMA) in N
Read full responseMeeting with Mette Toftdal Grolleman (Cabinet of Commissioner Jonathan Hill)
8 Oct 2015 · MiFID 2
Meeting with Jonathan Hill (Commissioner)
30 Jan 2015 · Introductory Meeting