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Further three-year delay on derivatives clearing for pension funds

first_imgEuropean pension funds have received a further three-year exemption from derivatives clearing rules in a move the European Commission claims will save them “up to €1.6bn”.Pension schemes will not be expected to comply with requirements to trade derivatives through clearing houses until 2020, the commission announced yesterday as it unveiled amendments to the European Market Infrastructure Regulation (EMIR).In its proposed amendments, the commission said “no viable technical solution facilitating the participation of [pension schemes] in central clearing has emerged to date”.The delay will give central clearing houses, pension schemes, and other players more time to come up with solutions, the European Commission said. However, Valdis Dombrovskis, vice-president responsible for financial stability, financial services, and the capital markets union, said central clearing for pension funds remained “a clear goal”.He added that the delay would help pension schemes “avoid estimated losses of up to €1.6bn”.The decision marks the third time the European Commission has delayed bringing pension funds into EMIR’s scope. It originally pushed back the deadline by two years to August this year, before adding another year to this revised timetable.A spokesman for PensionsEurope, the continent-wide trade body, said: “The prolongation of the exemption is good news for pension funds. We appreciate that the European Commission has taken seriously into consideration the undue financial burden that would have resulted from [the] clearing obligation when only cash can be used as collateral. Now we need to use these extra years of exemption to find good permanent solutions.”James Walsh, policy lead for EU and international at the UK’s Pensions and Lifetime Savings Association, welcomed the exemption.“This extension recognises that the market has not yet developed a practicable solution for clearing by pension schemes,” he said. “While this development removes the worrying prospect of compulsory clearing from August 2018, it does not present a solution to the underlying problem. Derivatives are an essential tool for pension funds, who use them to hedge their risks and ensure they can pay pensioners.”In a speech announcing the EMIR amendments, Dombrovskis also outlined regulatory effects on non-EU-based central clearing houses, a particularly important issue with the UK’s impending exit from the EU. London is a key hub of derivatives trading in Europe, with the commission estimating that as much as 75% of euro-denominated interest rate derivatives are traded in the UK capital.Dombrovskis said the European Commission was considering whether to require clearing houses “of key systemic importance” to be domiciled within the EU. Alternatively, the commission could request “enhanced supervisory powers” over clearing houses in non-EU countries.He added that detailed discussions on this issue would begin soon, with a view to proposing legislation in June.In addition to the exemption for pension funds, the commission also announced a streamlining of reporting requirements to alleviate the burden on smaller players in the derivatives markets, particularly non-financial companies.last_img read more

Badgers face struggling Boilermakers, rolling Illini

first_imgThe Wisconsin men’s tennis team (7-11 overall, 1-6 conference) heads into the backstretch of the Big Ten schedule this weekend facing No. 75 Purdue (3-12, 0-6) and No. 2 Illinois (16-3, 6-0). The Badgers dominated No. 57 Minnesota last Friday 7-0, notching their first conference win of the season before falling to No. 30 Rice 2-4 on Saturday.Senior Captain Alex Kasarov led Wisconsin by winning both of his singles matches and joining his brother Lachezar in winning his doubles matches against Minnesota.“The last couple of matches, [Alex] is playing at a level where he is a top-20 player in the country,” head coach Pat Klingelhoets said. “Unfortunately it is going to be very hard for him to make the NCAA right now just because he took some losses earlier in the year that are going to hurt him, but he is at a level with any of the best players in the country right now.”Kasarov feels confident as he heads down the final weeks of the schedule and his career.“I know how good I can play; I’m confident,” Kasarov said. “I just got to go out there and get everything together, and if I do that, there are very few people that can beat me in the country.”The elder Kasarov is not the only Badger feeling more confident after sweeping Minnesota for their first conference win this season.“[Beating Minnesota] helped the guys a lot,” Klingelhoets said. “I think it kind of took the pressure off. The nice thing was that everybody played well. It wasn’t like we only had four or five guys play well; everybody played well. I think it helped everybody, gave everybody some confidence.”Wisconsin hopes to continue their Big Ten success against two very difficult opponents in Purdue and Illinois this weekend.“I expect two very tough matches against Purdue and Illinois,” Kasarov said. “But I think we have a chance in both matches.”Against Purdue, Wisconsin is facing a team that has struggled finding its first victory in conference play. The winner of this contest will also get a leg up on the other for seeding in the conference tournament.“We certainly feel we can win that match with Purdue,” Klingelhoets said. “They have been struggling a little bit lately too. It’s going to be a tough match, but we definitely feel we can get that match. If we get that match it is going to help our seeding a lot for the Big Ten Tournament, so obviously it is a big match for us.”The road gets much tougher after Purdue as Wisconsin faces Illinois, the owners of a 45-game conference winning streak.“We just go in against [Illinois] with nothing to lose and play our butts off,” Klingelhoets said. “But if we get the win against Purdue, it helps a lot. Then we can go in there feeling like, ‘hey, just give it our best shot.’”last_img read more