Ministers at the Economic and Financial Affairs Council reached an agreement on the draft regulation aimed at increasing transparency on all derivatives and reducing risk in the over-the-counter (OTC) derivatives market in order to facilitate negotiations with the European Parliament. The main change relates to the procedure for authorising central counterparties (CCPs), in particular to the powers of the CCP's "home" member state.

The Council adjusted its position to facilitate rapid agreement with the European Parliament on draft regulation aimed at increasing transparency on all derivatives and reducing risk in the over-the-counter (OTC) derivatives market. The main change to a general approach agreed by the Council in October relates to the procedure for authorising central counterparties (CCPs), in particular to the powers of the CCP's "home" member state.

In order to facilitate agreement with the Parliament, which is pushing for a stronger role for the college of supervisors and for ESMA, the Council approved a proposal by the presidency which would introduce two additional safeguards: following a negative opinion of the college, with "unanimity minus one", the "home" member state can refer the matter to ESMA for binding mediation; and when a "sufficient" majority in the college opposes authorisation of a CCP, this "sufficient majority" may then decide to put the issue to ESMA for binding mediation.

The proposed draft regulation calls for the clearing of standardised OTC derivative contracts through CCPs in order to reduce counterparty risk (i.e. the risk of default by one party to the contract). The draft legislation also calls for the reporting of all derivative contracts to trade repositories (i.e. central data centres). Trade repositories would have to publish aggregate positions by class of derivatives, thereby offering market participants a clearer view of the derivatives market. ESMA would be responsible for the surveillance of trade repositories and for granting and withdrawing their registration.