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European Commission Adopts MiFIR Delegated Regulation on Straight-Through Processing

On June 29, the European Commission adopted a delegated regulation (Regulation) under the Markets in Financial Instruments Regulation (MiFIR) in relation to “straight-through processing”—i.e., the obligation to clear derivatives traded on regulated markets and the timing of acceptance for clearing.

Under MiFIR, trading venues, central counterparties (CCPs) and clearing members are required to have systems, procedures and arrangements in place to ensure derivatives are cleared as quickly as technologically practicable. The Regulations further specify requirements for trading venues and CCPs to achieve timely clearing, which include: (1) arrangements to facilitate the transfer of information; (2) pre-trade checks for cleared derivatives concluded on trading venues; (3) timeframes for transferring information for cleared derivatives concluded on trading venues and bilaterally; and (4) the treatment of cleared derivatives not accepted for clearing. For exchange-traded derivatives, those requirements will not apply, provided the relevant contractual arrangements offer certainty of clearing.

As mentioned in previous updates, the European Council and European Parliament will consider the Regulation and, once formally approved, the Regulation will go into effect 20 days following its publication in the Official Journal of the European Union.

For more information, see the Corporate & Financial Weekly Digest editions of June 17, June 10, May 27, May 20, April 29 and April 15.

A copy of the Regulation can be found here.

©2018 Katten Muchin Rosenman LLP

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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring and documentation relating to OTC derivatives and structured products.

Prior to joining Katten, Nathaniel was a member of the US Regulatory and the Derivatives and Structured Finance practices at Allen & Overy LLP.

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666