ISDA's Response to EC's Capital Markets Consultation

ISDA's Response to the European Commission's Consultation on EU Capital Markets Integration

Introduction

The International Swaps and Derivatives Association (ISDA) recently submitted a detailed response to the European Commission's (EC) consultation on the integration of EU capital markets. This consultation is a significant component of the EC's broader Savings and Investment Union project, aimed at enhancing the efficiency and integration of capital markets across the European Union.

Key Themes Addressed by ISDA

1. Burden Reduction in Financial Reporting and Sustainable Finance Disclosures

ISDA highlights the need to streamline financial reporting requirements and sustainable finance disclosures. The association argues that reducing these burdens will facilitate smoother operations for financial institutions and enhance their ability to contribute to the EU's economic growth.

2. Protection of EU Firms' Global Market Operations

Under the Settlement Finality Directive, European Market Infrastructure Regulation (EMIR), and the Markets in Financial Instruments Regulation (MIFIR), ISDA emphasizes the importance of safeguarding the ability of EU firms to operate seamlessly in global markets. This protection is crucial for maintaining the competitiveness of EU firms on the international stage.

3. Preserving Multilateral Netting and Collateral Certainty

ISDA underscores the necessity of preserving multilateral netting and collateral certainty for derivatives businesses. These elements are vital for reducing systemic risk and ensuring the stability of financial markets, particularly where current EU frameworks exhibit uncertainty.

4. Centralized EU Supervision of Central Counterparties

ISDA adopts a 'wait and see' approach regarding more centralized EU supervision of central counterparties (CCPs) following the implementation of EMIR 3. The association suggests that careful consideration is needed to balance effective oversight with operational flexibility.

5. Empowering ESMA with 'No Action' Powers

ISDA advocates for less encumbered 'no action' powers for the European Securities and Markets Authority (ESMA). This empowerment would allow ESMA to respond more swiftly and effectively to emerging market challenges, thereby enhancing regulatory responsiveness.

Conclusion

ISDA's response to the EC's consultation reflects a comprehensive analysis of the current challenges and opportunities within the EU capital markets framework. By addressing key areas such as financial reporting, global market operations, and regulatory oversight, ISDA aims to contribute to a more integrated and resilient capital market in the EU.

Quelques pistes pour l'intégration opérationnelle dans votre dispositif :

- Évaluer et ajuster les processus de reporting financier pour réduire les charges administratives.

- Assurer la conformité avec les directives EMIR et MIFIR pour protéger les opérations sur les marchés mondiaux.

- Renforcer les pratiques de compensation multilatérale et de gestion des garanties pour les activités de dérivés.

- Surveiller les développements liés à la supervision centralisée des contreparties centrales sous EMIR 3.

- Collaborer avec ESMA pour anticiper et s'adapter aux changements réglementaires.