European Market Infrastructure Regulation (EMIR)
European Market Infrastructure Regulation: EMIR
Date of application: 16 August 2012
This text responds to the undertakings of the G20 (2009 Pittsburgh Summit) in order, by the end of 2012, to increase the transparency of the derivatives market and reduce the current risk induced by transactions which mostly remain dealt bilaterally (pure OTC – Over The Counter). It can be likened to the American Dodd Franck Act which dedicates part of the text (chapter VII) to the regulation of these transactions.
EMIR is made up of three main topics:
The mitigation of the risk for OTC derivatives contracts
Mandatory clearing for products considered sufficiently standards
For contracts not cleared, reinforcement of the rules to mitigate both the operational risk and the counterparty risk (for example via bilateral exchanges of initial / variation margins)
Transparency via the mandatory reporting to Trade Repository of derivatives contracts (ETD and OTC)
Reinforced requirements for Central Counterparties
Creation of a EU Trade Repository status
EMIR REFIT (Regulation (EU) 2019/834) :
The regulation amending EMIR as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty (CCP), the registration and supervision of trade repositories (TR) and the requirements for TRs, was published in the Official Journal of the European Union on 28 May 2019 and entered into force on 17 June 2019.
EMIR 2.2 (Regulation (EU) 2019/2099):
The regulation amending EMIR as regards the procedures and authorities involved for the authorisation of CCPs and requirements for the recognition of third-country CCPs, was published in the Official Journal of the European Union on 12 December 2019 and entered into force on 1 January 2020.