On 15 September 2010, exactly two years after the bankruptcy of Lehman Brothers, the European Commission (EC) published its Proposal for a Regulation of the European Parliament and of the Council on Over-The-Counter (OTC) Derivatives, central counterparties and trade repositories. It is aimed at enhancing transparency, withstanding shocks of the credit default swaps and reducing the overall vulnerability of the counterparty credit risk. It will enter into force on 1 July 2012.
The main goal of the proposal is the establishment of central counterparties (CCPs) for OTC derivatives clearance and the creation of trade repositories (TRs) responsible for gathering data to identify, early on, where imbalances may be building up. The scope of the regulation is wide, laying down uniform requirements covering financial counterparties, non-financial counterparties (exceeding certain thresholds) and all categories of OTC derivatives.
