European Market Infrastructure Regulation
European Market Infrastructure Regulation (EMIR) is a European Union regulation designed to increase the stability of the over-the-counter (OTC) derivative markets throughout the EU states. It is designated Regulation (EU) 648/2012, and it entered into force on 16 August 2012.
G20 leaders made a commitment in Pittsburgh in September 2009 that:
All standardised OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements. We ask the Financial Stability Board and its relevant members to assess regularly implementation and whether it is sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse.
- Reporting obligation for OTC derivatives
- Clearing obligation for eligible OTC derivatives
- Measures to reduce counterparty credit risk and operational risk for bilaterally cleared OTC derivatives
- Common rules for central counterparties (CCPs) and for trade repositories
- Rules on the establishment of interoperability between CCPs
According to the first analysis of the provisions of (EU) Regulation No. 648 of 2012 (EMIR), these rules tries to satisfy the need to avoid certain practices of negotiating – privately and on the basis of information available only to the contracting parties – some types of financial instruments (and, in particular, derivatives).
Certain Authors focus on the rules that aim at increasing the transparency and the safety of the capital markets, in line with the evolution of communication processes, centralizing data in warehouses available to any financial operator.Today, this centralization sets the stage for a new set up of the financial transactions. The implementation of the EMIR provisions (and, therefore, of appropriate clearing and reporting mechanisms) affects also the organization of an industry that will ensure a more effective protection of the "right to information". In conclusion, the relevant researches highlight that Emir will impact on the key factors of a ‘market for financial information’, which is not yet considered as a reality by the EU regulator. We remain, then, with the unsatisfied expectation that the EU has not considered (and regulated) all the activities related to the demand and supply of information about market trends and financial instruments features.
- Swap Execution Facility
- Trade Repository
- European Securities and Markets Authority
- European Systemic Risk Board
- Markets in Financial Instruments Directive
- "European Market Infrastructure Regulation (EMIR)". European Securities and Markets Authority. Retrieved 15 August 2013.
- "About EMIR" (PDF). Financial Services Authority. Retrieved 20 February 2012.
- "See Lemma (2015), Financial Information Regulation and Emir Principles, in Open review of management banking and finance, p. 8 ff. About EMIR".
- European Commission – Financial Markets Infrastructure
- European Commission – Financial Markets Infrastructure – Derivatives
- ESMA consultation paper – Draft Technical Standards for the Regulation on OTC Derivatives, CCPs and Trade Repositories
- Challenges of EMIR Delegated Reporting for Derivatives Trades at RiskFocus.com
- TradeTech Blog – EMIR: What is it? No, really. What is it?!