European Market Infrastructure Regulation (EMIR) Overview

Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories entered in force on 16 August 2012. The most important aim of the European Markets Infrastructure Regulation (EMIR) is to increase the transparency of the over the counter (OTC) derivatives market, so that the EU with the help of European Securities and Markets Authority (ESMA) to have a clear view about the turnover, participants and any possible market manipulation. Another objective is to reduce the number of the counterparties involved and reduce the operational risk for market participants.

EMIR establishes new regulatory requirements on all types and sizes of entities that enter into any form of derivative contract, including those not involved in financial services. It also indirectly applies to the non-EU entities trading with EU entities. The new regulatory requirements are separated into three main categories: transaction reporting; clearing and risk mitigation.

Reporting obligation

(under Art. 9 of EMIR)

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Clearing obligation

(under Art. 4 of EMIR)

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Risk
mitigation

(non-cleared OTC derivatives)

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