EMCF - Regulatory

Regulatory overview
EMCF, the Dutch Central Bank, DNB, and the Netherlands Authority for the Financial Markets, AFM, have entered into an agreement in 2007 whereby the parties have agreed upon the voluntary supervision of EMCF by these Dutch regulators. In this agreement, the parties agreed that the supervision would remain in force until legislation regarding the license requirements and supervision of central counterparties would enter into force.

A proposal for legislation on license requirements and supervision of central counterparties (and central securities depositories) has been submitted to the Dutch Parliament in July 2009. At this stage in the legislative process, the Minister must prepare a memorandum following the debate in the relevant committee of the Dutch Parliament. However, the Dutch Ministry of Finance is currently studying the recent proposal for a European regulation on the market infrastructure and has stated that no next steps in the process of legislation will be taken prior to this study being completed.

Since April 2010 EMCF is subject to statutory supervision and oversight through an additional agreement in place between EMCF, the DNB and the AFM. This agreement is based on Dutch statutory law, i.e. on section 4:91a sub 7 of the Dutch Act on the Financial Supervision (Wet op het financieel toezicht) and relates to the central counterparty services which EMCF has agreed to provide to a Dutch multilateral trading facility.

Pursuant to this agreement, EMCF needs to comply with the ESCB-CESR recommendations for Central Counterparties. Also, EMCF must inform the DNB and the AFM of system modifications, intended amendment in the management structure of EMCF needs to be assessed by the DNB and the AFM (including a "fit & proper test") and the DNB and the AFM are allowed to provide instructions to EMCF. The 2007 agreement does not intervene with this supervision and oversight and is therefore still in place.

In 2008, EMCF applied to become a Recognised Overseas Clearing House ("ROCH") with the Financial Services Authority (FSA) in the United Kingdom. This status was granted in January 2009. The FSA had recommended this application to better enable it to supervise post-trade services provided by EMCF to MTFs which are supervised by the FSA. EMCF is approved by the Finnish Ministry of Finance to act as Clearing House in Finland on a cross border basis.Furthermore, EMCF is also an approved foreign clearing centre, approved by the Danish Financial Supervisory Authority.

Useful links
• De Nederlandsche Bank
(DNB).

• Autoriteit Financiële
Markten (AFM).

• FSA register.

• European Association of
Clearing Houses (EACH).

• IOSCO.

• CESR Recommendations
for CCPs.

• BIS recommendations for
CCP's.