ESMA highlights June 21 clearing start

The European Securities and Markets Authority (ESMA) has confirmed that firms will have to centrally clear certain classes of interest rate swaps from June 21 next year. This clearing obligation in the Europe Union (EU) will enter into force following the publication of the relevant technical standards in the Official Journal early this week.

The obligation will cover the following OTC interest rate derivatives denominated in the G4 currencies (euro, sterling, yen and US dollar):

  • fixed-to-float interest rate swaps (also known as plain vanilla);
  • float-to-float swaps (also known as basis swaps);
  • forward rate agreements;
  • overnight index swaps.

The next clearing obligations will cover index credit default swaps as well as interest rate swaps denominated in NOK, PLN and SEK.