EMIR - Financial Conduct Authority

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

Published: 08/05/2015     Last Modified: 09/09/2015
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.

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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.

  • 16 August 2012: EMIR entered into force, but most provisions only apply after technical standards enter into force.
  • 15 March 2013: The technical standards on OTC Derivatives, Reporting to Trade Repositories and Requirements for Trade Repositories and Central Counterparties entered into force.
  • 15 March 2013: Non-financial counterparties exceeding the clearing threshold are required to notify the FCA.
  • 15 March 2013: All legal and contractual terms of non-centrally cleared OTC derivative contracts must be confirmed between counterparties within specified timelines.
  • 15 September 2013: Risk management of non-cleared OTC derivatives through portfolio reconciliation, dispute resolution and trade compression will apply.
  • 12 February 2014: Details of all classes of derivative contract (both OTC and ETD) are required to be reported to recognised trade repositories.
  • 18 March 2014: The first CCP was authorised under EMIR.
  • 10 April 2014: The technical standards on the cross-border application of EMIR came into effect. Article 2 however (which sets out which contracts have a direct, substantial and foreseeable effect within the EU) applied from 10 October 2014.
  • 11 August 2014: Financial counterparties/NFC+s are required to provide daily reports on mark-to-market valuations of positions and on collateral value.
  • 1 September 2016: Variation margining requirements for non-centrally cleared trades will apply for the largest institutions.
  • 1 March 2017: Variation margining requirements for non-centrally cleared trades will apply for all other institutions that are within scope.
  • 1 September 2016 – 1 September 2020: Initial margining requirements for non-centrally cleared trades will apply from 1 September 2016 for the largest institutions. This will be followed by an annual phase in such that all other institutions that are within scope above a minimum threshold will be subject to initial margin from 1 September 2020.

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 

August 2015

ESMA consultation on Article 26 of RTS 153/2013 (CCP client accounts

On 27 August 2015, ESMA published a consultation paper on the review of Article 26 of EMIR Regulatory Technical Standards 153/2013 which deals with Central Counterparties' client accounts. It is aimed at CCPs, clearing members and counterparties accessing CCP services as clients of clearing members. ESMA is seeking stakeholder's feedback by 30 September 2015.

EMIR Review - ESMA reports to the Commission

On 13 August 2015, ESMA published four reports on how the EMIR framework has been functioning, and providing input and recommendations to the European Commission' EMIR Review. Three of the reports are required under Article 85 of EMIR, and cover non-financial counterparties, pro-cyclicality and the segregation and portability for CCPs. The fourth report responds to the European Commission's EMIR Review Consultation and includes recommendations on amending EMIR in relation to the clearing obligation, the recognition of third country CCPs and the supervision and enforcement procedures for trade repositories.

Delegated Regulation relating to clearing of interest rate derivatives denominated in the G4 currencies 

The European Commission adopted new rules in the form of a Delegated Regulation that will make it mandatory for certain over-the-counter (OTC) interest rate derivative contracts denominated in the G4 currencies (GBP, EUR, JPY and USD) to be cleared through central counterparties. 

The rules supplement the European Market Infrastructure Regulation (EMIR) and form part of the implementation of the agreement by G20 leaders in 2009 that standardised OTC derivative contracts should be centrally cleared through CCPs. Please note that the Delegated Regulation is subject to scrutiny by the EU Parliament and Council of the EU. Once finalised, the rules will be published in the Official Journal of the EU and will enter into force on the twentieth day following publication. The clearing obligations will then be phased in over a period of three years according to counterparty category (NB: counterparties will need to refer to the definitions in the Delegated Regulation to establish which category they fall within) allowing time for smaller market participants to comply. Financial counterparties in categories 1 and 2 should also note the frontloading requirements that are set out.

As noted above, the Delegated Regulation covers certain interest rate swaps denominated in the G4 currencies. The specific classes that are within scope are set out in the Annex to the Delegated Regulation, and have specific features, including the index used as a reference for the derivative, its maturity, and the notional type. 

As shown, the new rules cover the following types of contract:

  • Fixed-to-float interest rate swaps (IRS), known as 'plain vanilla' interest rate derivatives;
  • Float-to-float swaps, known as 'basis swaps';
  • Forward Rate Agreements; and
  • Overnight Index Swaps.

The Delegated Regulation is based on the proposals put forward by the European Securities and Markets Authority (ESMA). As noted in the Commission’s press release it is expected that ESMA will propose obligations for other types of OTC derivative contracts in the near future. 

July 2015

Presentation slides - EMIR: The obligation to clear and margin OTC derivative trades 

We recently held a seminar on EMIR – the obligation to clear and margin OTC derivative trades and have published the slides. 

The seminar proved to be extremely popular and we will be making further sessions available in the near future, with further details to follow.

View our EMIR library page for our past presentations.

June 2015

ESAs publish Second Consultation on margin RTS for non-cleared derivatives

On 10 June 2015, the European Supervisory Authorities (ESAs) launched a second consultation on draft RTS on margin requirements for non-centrally cleared derivatives under EMIR.

This second consultation paper builds on the proposals outlined in the first Consultation Paper, published in April 2014, and prescribes the regulatory amount of initial and variation margin that counterparties should exchange as well as the methodologies for their calculations. In addition, the draft RTS outline the criteria for the eligible collateral and establish the criteria to ensure that such collateral is sufficiently diversified and not subject to wrong-way risk. This second consultation paper follows close dialogue between the ESAs (comprising the EBA, ESMA and EIOPA), relevant authorities, and industry stakeholders since the initial consultation to identify operational issues that may arise from the implementation framework and address the comments received.  As a result, feedback is sought on a narrower set of topics. The draft RTS should also provide in-scope counterparties with greater clarity as to the requirements that will be proposed to the European Commission for adoption, and should therefore assist such with preparations for implementation. The RTS reflect the amended timelines announced in March 2015 by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO).  

The consultation runs until 10 July 2015.  All contributions received will be published following the close of the consultation, unless requested otherwise. A feedback statement in respect of this and the first consultation will accompany the final draft RTS.  Finally, stakeholders should be aware that the ESAs will hold a public hearing on the draft RTSs, which will take place at the EBA premises in London on 18 June 2015 from 12:00 to 14:30 UK time.

Commission extends transitional period to December 2015 for capital requirements for banks’ exposures to CCPs

On 4 June 2015, the European Commission adopted an implementing act that will extend the transitional period from 15 June 2015 to 15 December 2015 for capital requirements for EU banking groups’ exposures to CCPs under the Capital Requirements Regulation. Read the press release.

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.