PensionsEurope has urged the EU commission to work with pension providers to avoid imposing further costs and restrictions, as the EC reviews its European Market Infrastructure Regulation.
Matti Leppälä, PensionsEurope’s chief executive, said: “Without a fundamental review, European taxpayers are expected to pay for a system that facilitates highly profitable private institutions to benefit substantially from mandatory clearing.
“But this system puts pensioners’ money at risk, and pension funds may even become less safe as a result of Emir.”
Mr Leppälä made the comments as the EC launched a consultation into the regulation of over-the-counter derivatives, central counterparties and trade repositories.
European pension plans use OTC derivatives primarily to manage currency and interest rate-risks associated with their long-term liabilities, and are currently temporarily exempted from the clearing obligation of OTC derivatives.
Central clearing is part of the G20 group of countries’ reform agenda, with this process reducing the counterparty risk of these transactions.
Adviser view
Nick Lincoln, director at Values to Vision Financial Planning, said: “PensionsEurope has probably got more knowledge of what it is talking about in its little finger than all the European commissioners combined.
“The EU is seeking to put in rules and regulation without the thought of consequences to those the rules will affect.”
