On April 7, MFA and AIMA submitted a joint response to the European Commission (EC) consultation regarding its draft delegated regulation on commercial standards for central clearing services under EMIR. In the letter, the Associations:
- Reiterated support for the change made to Article 4 of EMIR to require clearing services to be provided on a “fair, reasonable, non-discriminatory and transparent” (“FRANDT”) basis;
- Urged the EC to ensure the scope of the obligation to apply FRANDT terms is not restricted to transactions covered by mandatory clearing under EMIR – that is, where both the OTC derivatives contract and counterparties to that are subject to the clearing obligation – and rather applies to all market participants; and,
- Urged the EC to ensure the commercial terms offered to clients and the on-boarding process are fair and transparent, and welcomed the EC’s proposal to require clearing service providers to disclose information on key commercial terms to prospective clients and provide both a high-level description of the on-boarding process and form for a request for proposal on their websites.