12.6.2023
EN
Official Journal of the European Union
C 204/11
2.1.3.
Collateral requirements
In general, there is merit in allowing CCPs to accept public guarantees and public bank guarantees as collateral.
The ECB acknowledges the Union’s regulatory efforts to alleviate exceptional liquidity stresses stemming from recent periods of unprecedented market volatility.
To avoid any doubt, however, and because the proposal remains silent on the specificities of commercial bank guarantees, the ECB emphasises that it does not support allowing uncollateralised commercial bank guarantees to be eligible collateral on a permanent basis (34).
The acceptance of uncollateralised commercial bank guarantees should remain a temporary regulatory measure applicable only to non-financial counterparties.
The possibility to accept uncollateralised commercial bank guarantees on a permanent basis would represent a structural shift in regulatory risk tolerance, going beyond the objective to address non-banks’ exceptional liquidity stresses.
In addition, the ECB cautions against allowing CCPs to accept commercial bank guarantees from all clearing members, including financial institutions, as opposed to only from non-financial counterparties as is currently the case.
Finally, the ECB proposes expanding the scope of the regulatory technical standards developed by ESMA, which lay down the conditions under which commercial bank guarantees may be accepted as collateral to include public guarantees and public bank guarantees.
This would allow ESMA to further specify the relevant collateral requirements with respect to public guarantees and public bank guarantees.
2.1.4.
Reporting obligation
The ECB strongly supports the proposal to remove the exemption from reporting requirements for intragroup transactions involving a non-financial counterparty (35).
In the context of the introduction of this exemption in 2017, the ECB identified several negative consequences for both the quality and usefulness of data reported under EMIR as well as the ability of the authorities to monitor financial stability in certain areas of financial markets (36).
These consequences are still relevant.
For example, the lack of information on certain intragroup transactions impaired the ECB in the exercise of its financial stability-related tasks during the 2022 energy markets turmoil.
The activity of non-financial companies represents a very large share of the energy derivatives markets.
As a result, the lack of data on intragroup transactions with at least one non-financial counterparty constituted a material gap in the ECB’s capability to monitor this segment of the derivatives markets.
More generally, in the commodity derivatives markets, intragroup transactions form a material part of total bilateral exposures between market participants, and their identification can reveal the importance of some large conglomerates from a financial stability perspective.
While the recent turmoil predominantly affected energy commodity derivatives, the nature of future crises cannot be predicted.
In general, the lack of a full market picture could also impede efficient monitoring of quickly changing market dynamics by competent authorities.
In this context, it is important to note that Regulation (EU) 2015/2365 of the European Parliament and of the Council (37) does not contain any similar exemption for reporting of intragroup repos, securities financing and margin lending transactions.
The removal of the exemption for intragroup transactions involving a non-financial counterparty from the reporting requirements of EMIR is an important measure for the establishment of a full market picture and achieving consistency between the respective regulations.
(34) See Article 1, point (33)(a), of the proposed regulation, which amends Article 46(1) of EMIR.
(35) See Article 1, point (5)(a), of the proposed regulation.
(36) See paragraphs 2.2.1 to 2.2.3 of Opinion CON/2017/42 of the European Central Bank of 11 October 2017 on a proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivatives contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories (OJ C 385, 15.11.2017, p. 10).
(37) Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 (OJ L 337, 23.12.2015, p. 1).