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European market infrastructure (EMIR)

 

On 29 March 2012, the European Parliament adopted the final text of the Regulation for the European Market Infrastructure Regulation (EMIR), with the aim to introduce greater transparency and better risk management to the ‘over the counter’ (OTC) Derivatives market.

Concretely EMIR, which is expected to be applicable as of 1 January 2013, will introduce:

i) a clearing obligation for eligible OTC derivatives with measures to reduce counterparty credit risk and operational risk for bilaterally cleared OTC derivatives,

ii) common rules for central counterparties (CCPs),

iii) a reporting obligation for OTC derivatives,

iv) rules on the establishment of interoperability between CCPs,

v) the concept of data trade repositories.

EMIR has to be seen in a broader global context. In Pitsburgh in 2009, the G20 leaders committed to the implementation of strong measures to “improve transparency and regulatory oversight of [OTC] derivatives in an internationally consistent and non-discriminatory way.” In the US, the Dodd-Frank Act defines the OTC Derivatives market regulation.

The situation is slightly more complex in Europe. Besides EMIR, which focuses on the post-trade handling of OTC contracts, other aspects of OTC regulation also need to be simultaneously addressed, notably for the trading/negotiation side by MiFID 2 and the Market Abuse Directive.

Other more remote texts may also intervene in the debate, among them the Securities Law Directive, the Central Securities Depositaries Regulation, and of course the EU version of the Basel III Accord (CRD IV).

For the ABBL, it is of paramount importance to keep the broad picture in mind with all these changes in order to avoid certain redundant or conflicting requirements.

 

Articles

  • 07/06/2013

    This document is intended to be continually edited and updated as and when new questions are re-ceived. The date on which each section was last amended is included for ease of reference

  • 30/04/2013

    The EBF and FEBELFIN organised a conference on the securities market in light of the many proposals that impact it: the MiFID/MIFIR, the CSD-R, EMIR, T2S …

  • 22/03/2013

    The ABBL organised on 21 March 2013 a conference dedicated to bring to light the stakes of the European Market Infrastructure Regulation (EMIR) for Luxembourg based financial actors.

  • 21/03/2013

    The European Securities and Markets Authority (ESMA) has published a set of Questions and Answers in order to promote common supervisory approaches and practices in the application of EMIR across the European Union.

  • 30/01/2013

    The ABBL would like to draw attention to recent developments in the US where it will become compulsory to use a LEI (Legal Entity Identifier) by April 10, 2013 to trade in certain derivatives instruments.

  • 23/01/2013

    The ABBL would like to draw attention to recent developments in the US where it will become compulsory to use a LEI (Legal Entity Identifier) by April 10, 2013 to trade in certain derivatives instruments. This identifier will be used when an entity reports a transaction to a swap data repository, and under new CFTC (Commodity Futures Trading Commission) rules this LEI will be required. Although in a first instance this LEI concerns only the swap market in the US, the ABBL felt it was opportune to draw attention to this G20 / FSB initiative as it is likely to be also required for other types of transactions as well as in future EU regulations, at least for their reporting parts (EMIR, MIFID II, etc.).

  • 15/01/2013

    The ABBL takes due note of the 3 consultation papers on Shadow Banking. The association would like to first warn that the concept of “shadow” does not necessarily mean that the activities are not regulated or supervised. The association has identified in many parts of these 3 dense documents areas that are either already regulated or will soon be regulated at EU level.

  • 03/01/2013

    Since a surprise rarely comes alone, the same day the EU Commission published its draft level 2 regulation on AIFMD it also produced part of the level 2 measures on EMIR.

  • 19/12/2012

    The good news about proposals to regulate shadow banking is that we are probably approaching the end of a long regulatory tunnel. An alternative view may be that the regulatory tsunami is slowly turning into a more ordinary wave of regulations. Indeed, the term “shadow”, although not very flattering for the industry, would suggest that regulators have addressed the body casting the shadow, as identified in the G20 regulatory agenda.

  • 30/08/2012

    The 5th of August was the deadline for response to the ESMA consultation on EMIR level 2 measures. Several elements are to be taken out of this exercise, first of all given the high level of uncertainties at the time the mandate was given, it appears that ESMA has gone beyond some requirements of the level 1 text notably in trying to impose additional rules to clients of CCPs’ Members.

   
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Last update June 2013

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