On July 2nd this year NOS Clearing ASA was acquired by NASDAQ OMX Stockholm AB. The integration of NOS Clearing ASA into NASDAQ OMX Stockholm AB is in progress and is gradually involving various business areas. In the final stage, the two clearing houses will be legally merged and your counterpart will become NASDAQ OMX Stockholm AB, a multi asset class clearing house, clearing commodities, equities and fixed income instruments.
During the course of the integration process there will also be regulatory changes that influence the timelines and the sequence of steps. EMIR (European Markets Infrastructure Regulation), and CPSS-IOSCO (International Organization of Securities Commissions) - the global requirements for clearing houses, are both results of the global reform of OTC markets that G20 decided in 2009. The integration process will take place during the second half of 2013 and NOS Clearing ASA would like to inform our Clearing Members about some areas where the upcoming changes will have an impact:
CPSS-IOSCO and EMIR will introduce significant changes to the over-the-counter (OTC) derivatives market by mandating central clearing for standardized contracts and imposing risk mitigation standards for non-centrally cleared contracts. There will also be wide reporting requirements.
The new regulations both encourage and mandate clearing through a central counterpart like NOS. The regulators will improve the protection of client assets which requires both changes in the way collateral is collected and managed. Also the regulators demand more responsibility on market participants which in turn imply changes in default structure and contributions.
The implementation of new regulation will be gradual. The technical standards on various topics were finalized by the European Securities and Markets Authority (ESMA) and the other European Supervisory Authorities on 30 September 2012 and put forward to the EU Commission for adoption. Once the technical standards have been adopted, all CCPs must apply for reauthorization. Once a CCP has been authorized under EMIR, ESMA will consider whether to apply a clearing obligation to the derivatives the CCP clears. The first clearing obligation is expected to be imposed in the summer of 2013.
NASDAQ OMX Stockholm AB and the integrated NOS Clearing ASA are expected to receive a new clearing license, in accordance with above, during the second half of 2013. Most of the changes to be expected are necessary in order to comply with the new regulations.
The upcoming mandatory changes including IT systems enhancements and other business initiatives are currently in the process of being finalized and more detailed information will be communicated in the coming months.
It is NASDAQ OMX Stockholm AB and NOS Clearing ASA’s ambition to implement the mandatory changes with as little impact to the members as reasonably possible and to provide them with assistance and support.
For more information please contact:
Morten Erichsen President +47 23 25 93 05