Sharon's speech in Plenary session in the European Parliament: EMIR on behalf of ALDE, 5th July 2011

There are two prongs to this legislation: First clearing derivatives through central counterparties so that there will not be the situation that prevailed after Lehman went down where it took a long time to sort out who owed who what - although it is worth pointing out that matters were by and large sorted out.

Second, reporting of all derivatives to a central registry so that in the future there will be a much better understanding of the level and ownership of derivative contracts and an alert be given if it seems there is build up of systemic risks.

The comparison with the US legislation has and will be taken seriously in order to avoid regulatory arbitrage. Equivalence not sameness is key, as we are not the US and there are important differences between our legislative process theirs, for instance the powers of rule making devolved to ESMA cannot be as wide as the US counterpart, and conduct of business aspects in the EU belong in MiFID and MAD.

I support exemption of FX from clearing since there are already settlement procedures through CLS bank that cover the risk. I also support exemption of pension funds from the clearing obligation and this should continue until the collateral problem has been solved. Here we do have a difference from the US in that their CCPs accept a wider range of collateral so that their pension funds are not caught in an expensive cycle of asset conversion that would apply under EMIR.

We also hear a lot about horizontal versus vertical silos these days, especially with takeover frenzy. What is important to my Group is open access and efficiency that competition that provides. We need to ensure that there is not unfair profiteering because the costs incurred in the financial system in general take their toll on the real economy and real people.

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