ESMA consults on eligibility of guarantees as CCP collateral and on aspects of CCP investment policy

The European Securities and Markets Authority (ESMA) has launched a consultation on draft regulatory technical standards (RTS) specifying the relevant conditions under which public guarantees, public bank guarantees and commercial bank guarantees may be accepted as collateral under the revised European Market Infrastructure Regulation (EMIR 3). Specifically, stakeholders, including non-financial counterparties, are requested to share views on: (i) the conditions under which public, public bank and commercial bank guarantees may be accepted as CCP collateral; (ii) the criteria for treating certain debt instruments as eligible under CCP investment policies; and (iii) the highly secure arrangements in which emission allowances posted as margins or default fund contributions can be deposited.

There is no mention of whether letters of credit, which are understood to be the instruments that are most desirable to be used in this context, would count as guarantees for such purposes, although ESMA has previously treated the two terms as synonymous. The deadline for responses is 30 April, after which ESMA expects to submit final draft RTS to the European Commission in Q4.

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