European Parliament calls for pension fund swaps clearing exemption
The European Parliament will push to exempt pension funds from mandatory central clearing for over-the-counter swaps on a permanent basis, according to Kay Swinburne, vice chair of the European Parliament’s Economic and Monetary Affairs Committee.
Speaking to reporters at ISDA’s Annual General Meeting in Lisbon today, Swinburne said that recent European Commission proposals for a three-year exemption as part of the European Commission’s review of European Market Infrastructure Regulation would likely be extended following negotiations with the European Parliament and European Council.
“I’m convinced it will be a permanent exemption,” the member of the European Parliament for Wales told reporters. “I don’t think there’s a benefit of including pension funds. Almost all of them are using these instruments under their statute for hedging risk so it’s an underlying hedge and for me they should be permanently excluded.”
The European Parliament originally called for a permanent exemption for pension funds in its 2010 paper on the issue, but the final EMIR text opted for a two-year exemption on the assumption that a solution would be found to address collateral concerns that the funds face when clearing their OTC swaps.
Full Content: Reuters
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