EMIR - Financial Conduct Authority

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

Published: 08/05/2015     Last Modified: 03/08/2015
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.

  • 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 

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.

May 2015

European Commission publishes consultation on EMIR Review

The European Commission has published a consultation asking for input on the implementation of, and first experience with, EMIR. All interested parties are encouraged to complete the questionnaire which has been provided for this purpose – comments are due by 13 August 2015. As part of the review, the Commission has also arranged for a public hearing on 29 May 2015 at the Commission's offices in Brussels.

ESMA publish consultation paper (no. 4) on clearing obligation under EMIR

ESMA has published a consultation paper that seeks stakeholders’ views on proposed regulatory technical standards (RTS) on the clearing obligation under EMIR.

This consultation paper (No.4) follows three previous consultation papers on the clearing obligation on interest rate derivative (IRD) classes, credit derivative classes, foreign-exchange non-deliverable forward (NDF) classes, as well as the publication of a final report on the clearing obligation on IRD classes and a feedback statement on NDF classes. The consultation paper provides explanations on the draft RTS establishing a clearing obligation on the following classes of OTC IRD, which were not included in the first RTS on the clearing obligation for interest rate swaps:

  • fixed-to-float interest rate swaps denominated in CZK, DKK, HUF, NOK, SEK and PLN; and
  • forward rate agreements denominated in NOK, SEK and PLN.

The input from stakeholders will help ESMA in finalising the relevant technical standards to be drafted and submitted to the European Commission for endorsement in the form of Commission Regulations. This includes input regarding the analysis of the costs and benefits that those legal provisions will imply. Comments are due by 15 July 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.

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.