EMIR - Financial Conduct Authority

European Market Infrastructure Regulation (EMIR) – what you need to know

Last Modified: 08/05/2015
The European Union regulation on derivatives, central counterparties and trade repositories (EMIR) introduces new requirements to improve transparency and reduce the risks associated with the derivatives market. EMIR also establishes common organisational, conduct of business and prudential standards for CCPs and trade repositories.

Go straight to our latest EMIR updates

EMIR imposes requirements on all types and sizes of entities that enter into any form of derivative contract, including those not involved in financial services. It applies indirectly to non-EU firms trading with EU firms.

The new regulation comes into force during 2013 and 2014. It requires entities that enter into any form of derivative contract, including interest rate, foreign exchange, equity, credit and commodity derivatives, to:

  • report every derivative contract that they enter into to a trade repository;
  • implement new risk management standards, including operational processes and margining, for all bilateral over-the-counter (OTC) derivatives i.e. trades that are not cleared by a CCP; and
  • clear, via a CCP, those OTC derivatives subject to a mandatory clearing obligation.

  • EMIR entered into force on 16 August 2012, but most provisions only apply after technical standards enter into force.
  • The technical standards on OTC Derivatives, Reporting to Trade Repositories and Requirements for Trade Repositories and Central Counterparties entered into force on 15 March 2013.
  • Non-financial counterparties exceeding, the clearing threshold have been required to notify the FCA since 15 March 2013.
  • All legal and contractual terms of non-centrally cleared OTC derivative contracts must be confirmed between counterparties within specified timelines – from 15 March 2013
  • Risk management of non-cleared OTC derivatives through portfolio reconciliation, dispute resolution and trade compression – from 15 September 2013.
  • Details of all classes of derivative contract (both OTC and ETD) have been required to be reported to recognised trade repositories from 12 February 2014.
  • The first CCP was authorised under EMIR on 18 March 2014 - a consultation is expected during summer 2014 with the first wave of clearing obligations to be phased in from 2015.
  • The technical standards on the cross-border application of EMIR came into effect on 10 April 2014 - Article 2 however (which sets out which contracts have a direct, substantial and foreseeable effect within the EU) will only apply from 10 October 2014.
  • From August 11 2014, financial counterparties/NFC+s will be required to provide daily reports on mark-to-market valuations of positions and on collateral value. 
  • Margin requirements for non-cleared trades - variation requirements for non-centrally cleared trades will apply from 1 December 2015. Initial margining requirements will be phased in between 1 December 2015 and 1 December 2019

Implementation dates are subject to change depending on the progress of EU implementation.

EMIR is composed of a number of separate EU Regulations. The EMIR library includes links to the relevant EU regulation and technical standards under EMIR, as well as links to additional Q&As, domestic legislation and FCA presentations.

Market participants can register to receive email updates on the EMIR from the FCA. These include information on the implementation timetable, alerts when new documents or further guidance are published and further details about the process for apply for making notifications and applying for exemptions in the UK.

To register to receive updates please email you name and contact details (including email address) to EMIR@fca.org.uk. You can unsubscribe at any time by emailing unsubscribe and your name and email address to the same address. 

Before contacting the FCA please review the information included in these web pages and the EMIR library, we aim to include the answer to a lot of common questions here. If you still have questions in relation to EMIR and its implementation in the UK please contact emir@fca.org.uk.

Latest Updates 

May 2015

10 third-country CCPs recognised by ESMA

The European Securities and Markets Authority (ESMA) has recognised ten third-country CCPs established in Australia, Hong Kong, Japan and Singapore.

The recognition by ESMA allows third country CCPs to provide clearing services to clearing members or trading venues established in the EU.

Those CCPs are established in jurisdictions which have been assessed as equivalent by the European Commission with regard to their legal and supervisory arrangements for CCPs. Several other steps led to the recognition of those third-country CCPs, including the conclusion of cooperation agreements with the relevant third-country authorities, as well as the consultation of certain European competent authorities and central banks, as foreseen by EMIR.

As a result, ESMA has published a list of the recognised third-country CCPs as well as the classes of financial instruments covered by the recognition of the following CCPs: ASX Clear (Futures) Pty Ltd, ASX Clear Pty Ltd, HKFE Clearing Corporation Limited, Hong Kong Securities Clearing Company Limited, OTC Clearing Hong Kong Limited, SEHK Options Clearing House Limited, Japan Securities Clearing Corporation, Tokyo Financial Exchange Inc, Singapore Exchange Derivatives Clearing Limited and The Central Depository (Pte) Limited.

Further information.

April 2015

Level II validation for trade reporting

ESMA has published a revised Q&A which focuses on level 2 validation, which ESMA expects TRs to implement by the end of October 2015. Details on the specific validation rules are available by clicking on the link directly from the most recent EMIR Q&As p.78.

March 2015

New EMIR Q&As

ESMA has just published the 12th update to its Q&A for EMIR. This update includes further guidance on the authorisation of CCP services, the clearing obligation and the Regulatory Technical Standards (RTS) on direct, substantial and foreseeable effect of contracts within the Union.

Update on implementation schedule for margin requirements

Basel and IOSCO has released a revision to the implementation schedule for margin requirements for non-centrally cleared derivatives. A delay of 9 months has been agreed, which will push the start of the phase-in period for posting and collecting margin from 1 December 2015 to 1 September 2016.

Archived EMIR news

Register for EMIR updates from the FCA

To register to receive updates please email you name and contact details (including email address) to EMIR@fca.org.uk. You can unsubscribe at any time by emailing unsubscribe and your name and email address to the same address.