Sources close to the Council of the European Union told Bloomberg that the legislative bodies responsible for revising European Markets Infrastructure Regulation (“EMIR”) are close to striking a deal. EMIR will create a regulatory regime for the over-counter-derivatives market and partially fulfill Europe’s G-20 obligations.
According to the sources, a majority of the Council states support a new draft put forward by Poland, which currently holds the EU presidency. The United Kingdom, previously a stumbling block to negotiations, apparently does not support this draft either, but the U.K. support is not essential to the rules’ safe passage.
Once approved by the 27-member Council, the EMIR draft will be finalized in negotiations with the European Parliament. The original rule was first proposed in September 2010 by Michel Barnier, the EU’s Financial Services Commissioner. Barnier is adamant that EMIR be completed as soon as possible. Chantal Hughes, Barnier’s spokeswoman, said “We hope to see substantial progress in coming days, including at next week’s meeting of finance ministers.”
Meanwhile, other countries are watching intently as Europe (and America) finalize their derivatives rules. The managing director of the Monetary Authority of Singapore insisted this week that they intend to create regulations equal to EMIR and Dodd-Frank: “In recent months, there has been a notion in some quarters that as tighter regulations are proposed for OTC derivatives in the US and EU, activity will flow to centres in Asia that are purposefully less heavily regulated. This is mistaken. Leading centres in Asia like Singapore, Hong Kong and Australia are very much part of the G20 process and initiatives, and there is no room for regulatory arbitrage.”