The European Parliament, meeting in Strasbourg, France, has decided not to pursue a resolution which, if passed, would have forced yet more delays in the EU's long-awaited post-crash centralised derivatives clearing regulation. The decision, reached at the end of last week, means that the new rules about the processing of over-the-counter (OTC) derivatives contracts on centralised clearing platforms and with increased transparency will now come into effect in mid-March 2013.
The European Parliament motion that threatened further delay was withdrawn shortly before it was due to go before Members of the European Parliament (MEPs) on 7 February. EU financial services commissioner, Michel Barnier, said the new rules, which require derivatives trading contracts to be cleared and recorded, can now come into force, most likely in mid-March 2013.
Currently most derivatives transactions are not centrally cleared and there is no snapshot of trades to see who is exposed, potentially creating huge uncertainties. The difficulty in unwinding trades after the 2008 crash brought home the magnitude of the problem and the need for post-crash changes to the system.
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