ISDA Publishes Study on Central Clearing in Equity Derivatives Market

ISDA published a study titled "Central Clearing in Equity Derivatives Market," which outlines the composition of the equity derivatives market and the extent of central clearing today. The study examines the criteria that should be assessed when determining whether a clearing mandate applies in the European Union.The study also considers whether the liquidity of the underlying reference share, which was proposed by European Securities and Markets Authority ("ESMA") as a possible method of defining a class of product, is appropriate for clearing mandate determinations.

According to ISDA, the March 18, 2014 approval of Sweden's Nasdaq OMX, which is the first central counterparty under European Markets Infrastructure Regulation ("EMIR"), focused attention on how a clearing determination will be applied across the EU. ISDA and its members stated that the criteria used to determine a clearing obligation, as proposed in an ESMA discussion paper on July 12, 2013, must be carefully considered.

See: ISDA Study on Central Clearing in the Equity Derivatives Market.Related news: ESMA Seeks Public Comment on Prepared Standards for OTC Clearing Obligation (July 15, 2013).