Markets in financial instruments

Key points:

• The proposal provides sound measures and instruments for addressing the clear shortcomings and imbalances in our system. In particular, the EESC considers that the new rules:
  • isolate the counterparty risk relating to the OTC market, making it external to banks, and manage it within dedicated organisations,
  • achieve consolidation of data on all OTC trading, not just that cleared through central counterparties (CCP),
  • give no recommendation regarding the future CCP market structure. Thus, either the existing structures in the individual Member States or a small number of large, Europe-wide bodies will emerge.
• One of the primary concerns is the costs of implementing the regulation, which appear to have been underestimated and will come at a time when financial institutions are already under pressure in terms of legislation, profitability and costs.
• These costs are inevitably passed on to investors and clients.
• Lastly, the most important implications of the new regulation include extending the asset classes concerned: it is planned to apply the regulation to all other financial instruments at the same time as shares.

Earlier EESC opinion: OTC derivatives, central counterparties and trade repositories (CESE 1617/2010, INT/537)

For more information please contact the INT Section Secretariat