ETR Advisory and ComTech Advisory are now busy researching and preparing the initial report for our European Regulatory study. The study looks at EMIR and REMIT primarily, examining the regulations in terms of what has been defined and what has yet to be defined by the regulators and what the potential impacts might be. Additionally, we will be looking at the CTRM and expanded software and services arena to see how vendors are responding and what they may be bringing to market to help their users deal with these new regulations. With regard to the latter, if you are a vendor or service provider and you would like to discuss your products and services with us for this study then please contact us as soon as possible at gvasey at comtechadvisory dot com.
If anything, it would appear that the regulatory workload is going to be larger than anticipated as some of the missing detail is provided. Recent answers from ESMA strongly suggest this as, for example, if two NFC group entities enter into an intra-group transaction with each other which does not fall within the hedging definition, both sides of the transaction should be counted towards the threshold. The total contribution to the group level threshold calculation would therefore be twice the notional of the contract. For non hedging intragroup transactions between one NFC and one FC, only the NFC side of the transaction needs to be counted. Counting a non hedged intra group deal towards the threshold twice, could have a huge impact on market participants being over or under the threshold. For other examples, see ETR Advisory’s Notes and Thoughts on ESMA Q & A’s.
We are targeting an initial report by the end of June. As usual, it will be issued free of charge. If you have any interest in advertising in this important study report or in sponsoring the study, please also contact me at the email address above.