Options Clearing Corporation
OCC
Founded in 1973, OCC is the largest clearing organisation in the world for equity derivatives.
ID: 344388839679-33
Lobbying Activity
10 May 2021
Dear Sir or Madam:
The Options Clearing Corporation (OCC) welcomes the opportunity to provide feedback on the European Commission’s (EC’s) Draft Implementing Regulation extending for one year the transitional provisions related to own funds requirement for exposures to central counterparties set out in Regulation (EU) No. 575/2013. We support extending this deadline.
OCC is pleased that the EC issued an equivalency determination with respect to the regulatory framework of the United States of America for central counterparties that are authorised and supervised by the U.S. Securities and Exchange Commission on January 27, 2021. We also understand that OCC and other central counterparties relying on this equivalence decision need to complete an application for recognition and provide information and data related to the tiering process that will be reviewed by the European Securities and Markets Authority (ESMA). If the transitional period ends on June 28, 2021, we are concerned that it may not allow ESMA enough time to review and make a determination on these applications and complete the tiering process.
We also recognise that the lack of recognition for third-country CCPs, coupled with expiration of the transitional provisions related to own funds for exposures to CCPs in the Capital Requirements Regulation (CRR), could have severe capital implications for banks and investment firms authorized in the European Union (“EU”) and their subsidiaries. Accordingly, we believe that failing to extend the transitional period could have negative implications for certain OCC clearing members that are subsidiaries of financial institutions established in the E U. As noted in the draft text, these clearing members may choose to withdraw as direct participants of OCC, which would have an adverse impact on their clients.
We commend the EC for its consideration of extending the transitional period in Article 497(1), point (b)(iii), of Regulation (EU) No 575/2013 until 28 June 2022 and we are fully supportive of this Draft Implementing Regulation.
Thank you for considering OCC’s response to the EC’s feedback request. We welcome any questions that you may have regarding our comments.
Respectfully,
Joseph P. Kamnik
Chief Regulatory Counsel
The Options Clearing Corporation
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