European Market Infrastructure Regulation (EMIR)

The European Market Infrastructure Regulation (EMIR) is an obligation to report all derivatives to trade repositories; a central clearing obligation for eligible OTC derivatives; measures to reduce counterparty credit risk and operational risk for bilaterally cleared OTC derivatives; as well as common rules for central counterparties (CCPs) and for trade repositories.

• In June 2022 the European Commission endorsed the EMIR Refit Standard
• The three-month non-objection period for the Parliament and Council is expected to end on 10 September 2022
• The publication in the Official Journal should take place soon after

Are you prepared for EMIR refit?

• All counterparties to all derivative transactions
• Includes financial and non-financial counterparties
• Under EMIR, a counterparty outside the EU does not have to report to a trade repository

Covers all derivative transactions:

- Equity, interest rate, currency, commodity, credit, “other”
- Includes OTC and exchange traded derivatives
- Differs from Dodd Frank by including ETDs -
- No exemptions for “non-EEA derivatives”
- Trading venue and underlying assets are irrelevant
- No exemptions for index or basket products
- Includes retail derivatives such as spreadbets
- Exchange-traded warrants are not included

No threshold below which transactions are not reportable
Includes modifications:

- Novations
- Terminations
- Partial terminations 

Trade repositories receive derivative trade details from different sources and make the information available to all relevant regulators (and a subset of information available to the public). Trade repository information:

• Helps detect systemic risk through position information
• Increases market transparency leading to greater understanding and increased confidence
• Determines and manage counterparty exposure in the event of a firm collapse