It will therefore be critical to ensure, in the context of the EMIR implementation, that information-sharing within the colleges will effectively address not only the micro-prudential concerns of authorities but also the need for appropriate macroprudential analysis. Second, another important concern regarding the institutional setting is the fact that global cooperative oversight arrangements for central counterparties are still lagging significantly behind what has been agreed in the CPSS-IOSCO Principles for financial market infrastructures. Indeed, the respective gap between the EU level and the global level is striking in this regard. In the European Union, given the introduction of legally binding requirements for central counterparty supervisors to cooperate and consult with all relevant authorities – including central banks, supervisors of major clearing banks and supervisors/overseers of interoperable infrastructures – cooperative oversight arrangements for all EU central counterparties, in the form of EMIR colleges are currently being set up. At a global level, however, virtually no progress in cooperative oversight or even in terms of pure informationsharing has been achieved for several major global central counterparties outside the European Union. This is a key concern especially in the field of OTC derivatives, given the global nature and interconnectedness of these markets. Indeed, if we want to ensure that the introduction of mandatory clearing is implemented in a way that ensures that central counterparties manage systemic risk effectively, it is not enough that they are supervised and overseen in their home jurisdiction.
Of course, access to data should always be in line with the authorities’ mandate and with the CPSS-IOSCO guidance, issued last month, on authorities’ access to trade repository data. However, even if this is warranted, privacy laws, blocking statutes and indemnification clauses which are in place in several jurisdictions restrict effective access to the detail of OTC derivatives transactions. Another important issue is whether authorities will be able to aggregate data across trade repositories and jurisdictions. Where there is more than one authorised repository in a single jurisdiction, it will be necessary to aggregate data across repositories. This in itself will be challenging. If no central entity is responsible for such aggregation, it could well mean that a plethora of public authorities with an interest in accessing data will need to conduct this task. This would hardly be efficient. It gets even more complicated if data, for example for all entities of a large financial group which is present in several markets, have to be aggregated across jurisdictions, as the level of information reported to repositories is different. A lot of work has already been done to address these issues. The January 2012 CPSSIOSCO report on OTC derivatives data and reporting and aggregation requirements identified the Legal Entity Identifier (LEI) as an essential tool for aggregation. Good progress has been made in the development and implementation of the Global LEI System.