Today the European Parliament has signed off, after months of negotiations with the Council and the Commission, a first reading agreement on regulating the trading of over-the-counter (OTC) financial derivatives, partly blamed for the worsening of the financial crisis, as Lehman Brother's default has showed. Therefore - by meeting the G20 2009 commitments - this piece of legislation (European markets infrastructure regulation, EMIR) aims at introducing new rules and implementing measures to improve transparency and regulatory oversight of over-the-counter derivatives in an internationally consistent and non-discriminatory way.

Sharon Bowles (LibDems, UK) chairperson of the EP's Economic and Monetary Committee and ALDE negotiator on the Regulation, stressed: "I have been fighting for an open approach which I believe leads to better, more transparently regulated markets and reduces operational risks of all actors involved in the OTC contracts".  In this respect, Ms. Bowles continued by referring to amendments tabled by ALDE to ensure open and non-discriminatory access to CCPs and trading venues: "We ensured more transparency around the access requirements to CCPs trading venue, which has laid the groundwork for the Markets in Financial Instruments Directive (MiFID)".

The "principle of fair reasonable and non-discriminatory terms" (FRAND) for granting licensing adopted in EMIR was also a key point. "FRAND terms can be usefully be applied in a wide range of financial services, that's why I will be continuing to push for its implementation to achieve openness and competition while respecting legitimate property rights".

"These two important achievements will provide consumers and investors with more choice and efficient services". Moreover, she concluded: "ALDE fought for and won an exemption for pension funds from central clearing, meaning pensioners won't see a reduced return on their pension funds. It is important to ensure this exemption is carried through in the Capital Requirements Regulation with regard to the Credit Valuation Adjustment (CVA) charge."

In line with the need to ensure a further integration of the financial services in the Single Market, the Regulation empowers the recently established European Securities and Markets Authority (ESMA) with a key role in the European OTC derivates market. ESMA will be a member of the colleges supporting national authorities in charge of the supervision of the Central Counterparties (CCPs) operating in several Member States and will have binding mediation power if requested to give its opinion about the authorization of a CCP establishment.

ALDE coordinator in ECON Sylvie Goulard (Modem, France) reiterated that "In the future CCPs should be under the direct supervision of the ESMA, in line with de Larosière report and the European Supervisory Authorities regulations".

Note to editors:
Over-the-counter (OTC) derivatives contracts are not traded on an exchange but instead privately negotiated between two counterparts, following entry into force of EMIR these transactions will now have to be centrally cleared and all transactions will be reported to a trade repository.