EMIR is the European Market Infrastructure Regulation. As this a Regulation and not a Directive then it has direct effect in all EU Member States. It actually applies across the wider European Economic Area (EEA), but in those non-EU Member States – Norway, Lichtenstein and Iceland – EMIR must be transposed into local law.…
The purpose of EMIR is to introduce regulations to the Over the Counter (OTC) Derivatives Market, (involving forwards, swaps, options and futures etc.), in order to address the risks that were highlighted during the financial crisis, particularly during the fall of Lehman Bros and others. EMIR focuses on introducing transparency and mitigating counterparty credit risk.
Regulation of the European OTC markets will be completed by a revised Market in Financial Instruments Directive (MiFID II), Market Abuse Directive (MAD II) and Capital Requirements Directive (CRD IV). MiFID will cover exchanges and other trading venues such as Multilateral Trading Facilities (MTF’s), whilst MAD will extend equity markets level surveillance to OTC markets and introduce criminal sanctions for abusive behaviours. CRD IV will impose new capital charges.
As the revised MiFID – which will also take the form of a Regulation (MiFIR) – will require derivatives to be traded over a suitably authorised trading venue, 360T can assure its corporate clients that it will have obtained the appropriate authorisations from its home state regulator, the German Federal Financial Supervisory Authority (BaFin), to ensure that there will be continuity of business.
EMIR is introducing a number of elements:
- Risk Mitigation Requirements
- Record Keeping
Although EMIR came into force on 16 August 2012, full trade reporting in accordance with the provisions of EMIR did not commence until 12 February 2014.