EXPLANATORY MEMORANDUM

1.CONTEXT OF THE DELEGATED ACT

Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR) was adopted on 4 July 2012 and entered into force on 16 August 2012.

European central banks and Union public bodies charged with or intervening in the management of public debt are exempted from EMIR.

The European Commission is empowered under Article 1(6) of EMIR to adopt delegated acts in accordance with Article 82 to amend the list of entities to which EMIR shall not apply.

As required under Article 1(6) of EMIR, the European Commission has assessed the treatment of central banks and public bodies managing public debt by a number of third countries where the implementation of OTC derivative reforms were sufficiently advanced or which specifically requested an assessment. This analysis is presented in a report to the European Parliament and the Council which accompanies this delegated act. The report concludes that, at this juncture, central banks and public bodies charged with or intervening in the management of the public debt from Australia, Canada, Hong Kong, Mexico, Singapore, and Switzerland should be added to the list of exempted entities under EMIR.

2.CONSULTATIONS PRIOR TO THE ADOPTION OF THE ACT

As part of the assessment, the Commission services consulted the six jurisdictions under assessment to gather information on their legal frameworks with respect to OTC derivatives, and in particular of the treatment, within those frameworks, of central banks and public bodies charged with or intervening in the management of the public debt.

The Commission services also consulted the Expert Group of the European Securities Committee, consisting of Member State representatives.

3.LEGAL ELEMENTS OF THE DELEGATED ACT

Article 1 specifies the amendements to be made to the Regulation (EU) No 648/2012.

Article 2 provides that the Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal.

COMMISSION DELEGATED REGULATION (EU) No …/..

of 2.3.2017

amending Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to the list of exempted entities

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories 1 , and in particular Article 1(6) thereof,

Whereas:

(1)The exercise of monetary responsibilities and the management of sovereign debt have a combined impact on the functioning of interest rate markets and should be coordinated to ensure that these two functions are performed efficiently. As Regulation (EU) No 648/2012 excludes from its scope Union central banks and other Union public bodies managing debt so as not to impede their ability to perform tasks of common interest, the application of different rules to such functions when they are exercised by third-country entities would be detrimental to their effectiveness. In order to ensure that third country central banks and other public bodies charged with or intervening in the management of the public debt continue to be in a position to perform their tasks adequately, third-country public bodies charged with or intervening in the management of the public debt should also be exempted from Regulation (EU) No 648/2012.

(2)The Commission carried out an assessment of the treatment of public bodies charged with or intervening in the management of public debt and central banks under the national laws of certain third countries and presented its conclusions to the European Parliament and the Council. In particular, the Commission conducted a comparative analysis of that treatment as well as of the risk-management standards applicable to the derivative transactions entered into by those bodies and by central banks in those jurisdictions.

(3)The Commission's analysis concluded that central banks and public bodies charged with or intervening in the management of public debt in Australia, Canada, Hong Kong, Mexico, Singapore, and Switzerland should be exempted from the clearing and reporting requirements laid down in Regulation (EU) No 648/2012.

(4)The central banks and public bodies charged with or intervening in the management of the public debt in Australia, Canada, Hong Kong, Mexico, Singapore, and Switzerland should therefore be added to the list of exempted entities laid down in Regulation (EU) No 648/2012.

(5)The Commission continues to monitor on a regular basis the treatment of those central banks and public bodies exempted from the clearing and reporting requirements laid down in Regulation (EU) No 648/2012. The list may be updated in light of the development of the regulatory arrangements in those third countries and taking into account any relevant new sources of information. Such reassessment could lead to removal of certain third countries from the list of exempted entities,

HAS ADOPTED THIS REGULATION:

Article 1

In Article 1(4)(c) of Regulation (EU) No 648/2012, the following points are added:

"(iii)    Australia;

(iv)Canada;

(v)Hong Kong;

(vi)Mexico;

(vii)Singapore;

(viii)Switzerland."

Article 2

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 2.3.2017

(1) OJ L 201, 27.7.2012. p. 1.