Article 7
Criteria to be assessed by ESMA
1.
In relation to the degree of standardisation of the contractual terms and operational processes of the relevant class of OTC derivative contracts, the European Securities and Markets Authority (ESMA) shall take into consideration:
(a)
whether the contractual terms of the relevant class of OTC derivative contracts incorporate common legal documentation, including master netting agreements, definitions, standard terms and confirmations which set out contract specifications commonly used by counterparties;
(b)
whether the operational processes of that relevant class of OTC derivative contracts are subject to automated post-trade processing and lifecycle events that are managed in a common manner according to a timetable which is widely agreed among counterparties.
2.
In relation to the volume and liquidity of the relevant class of OTC derivative contracts, ESMA shall take into consideration:
(a)
whether the margins or financial requirements of the CCP would be proportionate to the risk that the clearing obligation intends to mitigate;
(b)
the stability of the market size and depth in respect of the product over time;
(c)
the likelihood that market dispersion would remain sufficient in the event of the default of a clearing member;
(d)
the number and the value of the transactions.
3.
In relation to the availability of fair, reliable and generally accepted pricing information in the relevant class of OTC derivative contracts, ESMA shall take into consideration whether the information needed to accurately price the contracts within the relevant class of OTC derivative contracts is easily accessible to market participants on a reasonable commercial basis and whether it would continue to be easily accessible if the relevant class of OTC derivative contracts became subject to the clearing obligation.