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and the date of application of the clearing obliga- tion for the class of OTC derivative contracts. ESMA proposes to only apply frontloading to con- tracts entered in Period B. What’s next? ESMA will outline further solutions in a public con- sultation before the finalisation of the draft RTS. The Commission will have to provide its views on this issue. THE LETTER IS AVAILABLE HERE. ISDA and FIA Europe published European Cleared Derivatives Execution Agreement Background The International Swaps and Derivatives Associa- tion (ISDA) and the Futures Industry Association of Europe (FIA Europe) foster safe and efficient deriv- atives markets to facilitate effective risk manage- ment for all users of derivative products. What’s in there? On 15 May 2014, ISDA and FIA Europe jointly an- nounced the publication of the ISDA/FIA Europe Cleared Derivatives Execution Agreement for prin- cipal-to-principal client clearing. The ISDA/FIA Europe Cleared Derivatives Execu- tion Agreement is designed to be used as a tem-

plate for market participants when negotiating ex- ecution agreements under English law for swaps that are intended to be cleared by central counter- parties located outside of the US. The agreement was developed with the assistance of a working group of both buy and sell-side insti- tutions in the European cleared over-the-counter (OTC) derivatives markets. What’s next? This ISDA / FIA template can be used in conjunc- tion with the ISDA/FOA Client Clearing Addendum to cover the obligations from the upcoming clear- ing obligation under EMIR when negotiating with other market participants. The clearing obligation will enter into force most Additional piece in the implementation of EMIR Background On 16 August 2012, the Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on Over-The-Counter Derivatives, Central Counterparties (CCPs) and Trade Repositories (TRs), also known as the EMIR Regulation entered into force. What’s in there? The EU Commission has published on 12 May 2014 one additional piece in the implementation of EMIR. The Commission Implementing Regula- tion (EU) No 484/2014 lays down implementing technical standards with regard to the hypothet- ical capital of a CCP according to Regulation (EU). likely end of 2014 / beginning of 2015. THE AGREEMENT IS AVAILABLE HERE.

Fund Processing Standardisation Background

Since May 2009 EFAMA & SWIFT regularly pub- lish reports on trends in standardisation and au- tomation rates of fund orders received by transfer agents in Luxembourg and Ireland. What’s in there? On 30 April 2014, EFAMA & SWIFT issued the an- nual report on automation and standardisation of cross-border funds orders in 2013. The current report is the full-year 2013 report. It combines the data from Luxembourg and Ireland into one report. The report provides: 1) an aggregated view on both fund processing centers together; 2) a detailed overview per fund processing center; 3) a regional perspective of fund processing STP rates per fund processing center. What’s next? The next report is planned for Q4 of 2014. It will cover the first half of 2014. THE REPORT IS AVAILABLE HERE. In October 2011 the European Commission pub- lished its proposal for the Markets in Financial In- struments Directive (MiFID) II and Regulation (MI- FIR). The European Parliament adopted the MiFID II package in a final vote on 15 April 2014. What’s in there? On 13 May 2014 the Council adopted the MiFID II package. For further information on this legislative package please refer to our earlier news on the adoption of the package by the European Parliament. What’s next? In line with the traditional approach for European legislation, the key next steps for the complete adoption of MiFID II regime are the following: Q2 2014: Publication in the Official Journal of the European Union; Q2 2014: Consultation by ESMA (advice, Regula- tory Technical Standards (RTS) and Implementing Technical Standards (ITS); Council adopts MiFID II/ MIFIR Background

No 648/2012 of the European Parliament and the Council. In particular, it contains standards for:

« Reference dates set for CCPs,

« Transitional provision reporting dates for CCPs,

« Frequency of reporting for CCPs.

These regulatory technical standards also com- plete Regulation (EU) 575/2013 (CRD IV) regarding the calculation of own fund requirements for trade exposures with CCPs. What’s next? The Implementing regulation has entered into force on 2 June 2014. THE IMPLEMENTING REGULATION IS AVAILABLE HERE.

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