ESMA issues public statement in relation to open access provisions for ETDs

Following our recent regulatory update – ‘CCP open access debate and possible further delay on the horizon’, the European Securities and Markets Authority (ESMA) released a public statement last Thursday 11 June explaining that the as of 4 July 2020 the open access provisions with respect to Exchange Traded Derivatives (ETDs) will start applying.

Trading venues and Central Counterparties (CCPs) which offer the trading or clearing of ETDs will be subject to the open access regime as stated within articles 35 and 36 of Regulation (EU) No 600/2014 of the European Parliament and markets in financial instruments and amending Regulation (EU) No 648/20121 (MiFIR).

The public statement mentions: “ESMA recalls that CCPs and trading venues may deny access requests in the cases described in detail in Commission Delegated Regulation (EU) 2017/581. Where a CCP or trading venue denies an access request it should provide full reasons for that decision identifying how the relevant risks arising from granting access would in the current situation be unmanageable and that there would be significant undue risk remaining.”

With the current market conditions driven by uncertainty and volatility from the COVID-19 pandemic, ESMA acknowledges that these circumstances may limit the ability of trading venues and CCPs to effectively process open access requests due to the lack of extra capacity and human resources necessary to review, test, simulate and grant access requests at a time when the majority of staff are working remotely and under business continuity arrangements.”

With this in mind, the purpose of the public statement is to ensure that market participants (primarily the National Competent Authorities (NCAs) and CCPs) are clearly informed to the extend relevant, in order to take the necessary actions and considerations when dealing with open access requests.

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