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EU must regulate 'all derivatives' - MEP

Friday 18 March 2011 - by Andrew Hickley

An influential MEP has proposed 159 amendments to the European Market Infrastructure Regulation, including curbs on all types of derivatives.

Sharon Bowles said on Friday that changes to Emir must cover all derivatives so that parliamentarians are not "left wondering why we bothered" to introduce market reforms.

The outspoken chair of the European Parliament's economics committee said that competition was "at the heart" of her proposed amendments.

She added that the changes would ensure that interoperability for cash securities remains part of Emir.

"Many, if not most, OTC derivatives will move on to exchanges or other platforms, so unless the regulation is extended to all derivatives we will be left wondering why we bothered," she said.



"It also makes sense to have the full picture of derivatives reported to repositories."

Bowles added that measures affecting pension funds and other specialist funds have not been appropriately dealt with in existing proposals, an area her amendments aim to address.

She continued: "Pension funds and real estate funds do not have the type of investments that lend themselves to posting collateral.

"This problem may be solved in the future but until then they should not be penalised for robust alternative arrangements.

"Similarly, we need to examine whether FX is better dealt with at the settlement stage."


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