E.U. Commission Publishes Regulations Setting Forth Clearing Obligations for Hedge Funds and Other Counterparties

The European Commission has published a draft Delegated Regulation (Regulation) setting out regulatory technical standards to supplement the clearing obligations imposed by European regulations relating to market infrastructure.  The draft Regulation specifies the classes of over-the-counter derivatives that should be subject to clearing; the dates from which the obligations will take effect for various types of counterparties, including clearing members, alternative investment funds and other financial counterparties; the minimum remaining maturities for the purposes of regulatory “frontloading” requirements; and the dates on which frontloading should start.  This article provides a summary of the Regulation.  For more on European regulatory obligations with respect to derivatives, see “Ropes & Gray Attorneys Discuss Implications for U.S. Hedge Fund Managers of the European Market Infrastructure Regulation,” Hedge Fund Law Report, Vol. 7, No. 27 (Jul. 18, 2014); and “How Have Dodd-Frank and European Union Derivatives Trading Reforms Impacted Hedge Fund Managers That Trade Swaps?,” Hedge Fund Law Report, Vol. 6, No. 40 (Oct. 17, 2013).

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