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NYSE Libor and ESMA OTC Derivative Clearing


Matt Levine, DealBreaker, NYSE Wants To Be Responsible For Libor For Some Reason, here.

Presumably NYSE Euronext got to actually see the numbers? Anyway, 12% of the Hoggers’ evaluation of proposals for Libor administrators was based on the proposed business model for Libor,2 so presumably NYSE Euronext – who beat out at least a London Stock Exchange/Thomson Reuters bidding group to take over Libor – has a plan to, like, increase the licensing fees. NYSE being NYSE it probably involves selling some people access to Libor a few seconds before other people?3

Nathaniel Popper, NYT, NYSE EuroNext to Take Over Administration of Libor, here.

A few weeks ago, European regulators approved NYSE Euronext’s sale to the IntercontinentalExchange, or ICE, an operator of derivatives exchanges based in Atlanta. NYSE Euronext has been trying to diversify its business beyond its traditional stock exchanges as stock trading volumes and revenue have fallen steadily.

European Securities and Markets Authority, The Clearing Obligation under EMIR, here

The input from stakeholders will help ESMA in the development of the relevant technical standards to be drafted and submitted to the European Commission for endorsement in the form of Commission Regulations, i.e. a legally binding instrument directly applicable in all Member States of the European Union. One essential element in the development of draft technical standards is the analysis of the costs and benefits that those legal provisions will imply. Input in this respect and any supportive data will be highly appreci- ated and kept confidential where required.


The following discussion paper is organised as follows: the first section presents the standard procedure for the determination of the classes of OTC derivatives to be subject to the clearing obligation. The second section presents the CCP-cleared OTC derivatives and the CCPs which clear them, with the objective of identifying the key characteristics to be retained when breaking down the OTC derivative contracts within classes. The third section gives a high level analysis of the current readiness of each asset-class vis-à-vis the clearing obligation, with regards to some of the criteria to be taken into account by ESMA when defin- ing the classes to be subject to the clearing obligation. The fourth section provides a preliminary analysis of the methodology to be used by ESMA when defining the dates from which the clearing obligation should apply, the types of counterparties to which the clearing obligation should apply and the remaining maturi- ty of the contracts to be subject to the clearing obligation. Finally the fifth section addresses specific issues linked to the clearing obligation such as the case of contracts concluded with covered bond issuers or with cover pools for covered bonds, the case of FX OTC derivatives, as well as some issues related to the proce- dure for the determination of the clearing obligation.


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