On January 5, 2017, the European Securities and Markets Authority (“ESMA“) published its methodology (ESMA71-1154262120-155) for mandatory peer reviews relating to the authorization and supervision of central counterparties (“CCPs“) under the European Market Infrastructure Regulation (“EMIR“) (the Regulation on OTC derivative transactions, CCPs and trade repositories (Regulation 648/2012)).

The scope of peer reviews under EMIR is defined, and ESMA has a specific role to further supervisory cooperation. Based on the experience of the first peer review undertaken in 2016 in the context of EMIR, ESMA’s Board of Supervisors decided that a methodology for the new type of peer reviews should build on the existing methodology. Further reviews will be conducted on, at least, a yearly basis.

The methodology sets out information relating to the legal basis and scope of the review, the topics covered, the assessment specifications and the approach taken to the questionnaire and report.

The application of the methodology will be restricted to peer reviews undertaken in the application of Article 26 of EMIR. This scope may be reconsidered by ESMA at a later date, when the mandatory peer reviews relating to other EU legislation need to be launched (for example, in relation to the Alternative Investment Fund Managers Directive (2011/61/EU) and the Regulation on improving securities settlement and regulating central securities depositories (Regulation 909/2014)).