ESMA promotes consistent (anti-) procyclicality margin measures for CCPs

On 28th May 2018, the European Securities and Markets Authority (ESMA) issued final guidelines on anti-procyclicality margin measures for central counterparties (CCPs) under the European Market Infrastructure Regulation (EMIR).

The adoption of the guidelines should enable national competent authorities (NCAs) to better supervise their CCPs in this respect. CCPs may also need to adapt their models and processes to the guidelines. Procyclicality of margin refers to the fact that margin requirements for the same portfolio are higher in times of market stress and lower in calm conditions.

Next Steps
The guidelines will become effective from 3 December 2018. The existing CCP Q&A 9(c) will be deleted as of the same date as the new guidelines cover its purpose.

The guidelines will be translated into the official languages of the European Union and within two months from the date of publication of the translations, each NCA must notify ESMA of its intent to whether or not to comply with the guidelines.