On 15 September, the second anniversary of Lehman Brothers’ bankruptcy no less, the European Commission published draft legislation overhauling the regulation of Europe’s over-the-counter (OTC) derivatives market.
The proposed legislation covers all OTC derivative contracts entered into by European Union-domiciled financial and non-financial institutions. It contains a framework for centrally clearing most standardised derivative contracts and scrutinising and controlling those which are not; beefy regulation of central counterparties (CCPs) and trade repositories; and strict reporting requirements to those newly-created trade repositories.
