EMIR

Find out more about the European Market Infrastructure Regulation on derivatives, central counterparties and trade repositories (EMIR), which imposes requirements to improve transparency and reduce the risks associated with the derivatives market.

EMIR, Brexit and the transition period

The UK has left the EU. It has now entered a transition period which is due to operate until 31 December 2020. During the transition period, EU law will continue to apply in the UK.

EU EMIR is directly applicable in the UK during the transition period, at the end of which this regulation will convert into UK law by operation of the European Union (Withdrawal) Act 2018 (EUWA).

The following four Statutory Instruments make changes to onshore EMIR at the end of the transition period by operation of the EUWA:

The EU EMIR Technical Standards will be brought into UK law at the end of the transition period by operation of the EUWA. The exit instruments made by the FCA which make changes to bring the standards into UK law are listed below. Other exit instruments relating to EMIR technical standards have been made by the Bank of England and PRA.

The Technical Standards (European Market Infrastructure Regulation) (EU Exit) (No 1) Instrument 2019 makes changes to onshore the following technical standards: 

  • Commission Implementing Regulation (EU) 1248/2012 of 19 December 2012 laying down implementing technical standards with regard to the format of applications for registration of trade repositories according to Regulation (EU) 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories;

The Technical Standards (European Market Infrastructure Regulation) (EU Exit) (No 2) Instrument 2019 makes changes to onshore the following technical standards:

  • Commission Delegated Regulation (EU) No 148/2013 of 19 December 2012 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards on the minimum details of the data to be reported to trade repositories; and
  • Commission Delegated Regulation (EU) No 149/2013 of 19 December 2012 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on indirect clearing arrangements, the clearing obligation, the public register, access to a trading venue, non-financial counterparties, and risk mitigation techniques for OTC derivatives contracts not cleared by a CCP.

The Technical Standards (European Market Infrastructure Regulation) (EU Exit) (No 3) Instrument 2019 makes changes to onshore the following technical standards:

  • Commission Delegated Regulation (EU) 150/2013 of 19 December 2012 supplementing Regulation (EU) 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards specifying the details of the application for registration as a trade repository; and
  • Commission Delegated Regulation (EU) 151/2013 of 19 December 2012 supplementing Regulation (EU) 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories, with regard to regulatory technical standards specifying the data to be published and made available by trade repositories and operational standards for aggregating, comparing and accessing the data.

The Technical Standards (European Market Infrastructure Regulation) (EU Exit) (No 4) Instrument 2019 makes changes to onshore the following technical standards:

  • Commission Implementing Regulation (EU) No 1247/2012 of 19 December 2012 laying down implementing technical standards with regard to the format and frequency of trade reports to trade repositories according to Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories

On 23 June 2020, a Written Ministerial Statement was presented to Parliament further confirming the UK approach to on-shoring the European Market Infrastructure Regulation (EMIR) and EMIR REFIT. The statement confirmed that the UK will create legislation to bring into UK law the remaining EMIR REFIT requirements that will apply in the EU after the end of the Transition Period. These are:

  • requirements for firms who offer clearing services to do so on fair, reasonable and non-discriminatory and transparent commercial terms (FRANDT requirements)
  • requirements for Trade Repositories (TRs) to have policies and procedures in place to reconcile and validate the data reported to them and for the orderly transfer of data to other trade repositories (TR requirements)

We will work alongside HM Treasury and the Bank of England to implement these requirements into UK law.

This approach is subject to any further statements that HM Treasury or we may issue.

EU EMIR

The European Market Infrastructure Regulation on derivatives, central counterparties and trade repositories (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 imposes requirements to improve transparency and reduce the risks associated with the derivatives market.

It applies indirectly to non-EU firms trading with EU firms. EMIR also establishes common organisational, conduct of business and prudential standards for central counterparties (CCPs) and trade repositories (TRs).

EMIR requires entities that enter into derivative contracts, including interest rate, foreign exchange, equity, credit and commodity and emission derivatives, to:

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

Update to EMIR - EMIR REFIT

EMIR has been amended by Regulation (EU) No 2019/834 of the European Parliament and of the Council of 20 May 2019 in the context of the European Commission’s Regulatory Fitness and Performance Programme (REFIT). We use 'EMIR REFIT' to refer to the new text of EMIR as amended. 

EMIR REFIT entered into force on 17 June 2019. Please refer to our EMIR news page for more details on ESMA Q&As and FCA system changes for receiving notifications from firms under EMIR.

Key changes under EMIR REFIT include:

  • Financial counterparties that are considered to be small (small financial counterparties or SFCs) are exempted from the obligation to clear their transactions through a central counterparty (CCP), while remaining subject to risk mitigation obligations.
  • Non-financial counterparties (NFCs) are subject to reduced clearing obligations.
  • The temporary exemption from the clearing obligation for Pension Scheme Arrangements (PSAs) is extended by another four years for EEA PSAs.
  • The existing reporting obligations have been streamlined, with firms being able to exempt themselves from reporting intragroup transactions when one of the counterparties is an NFC.

Register for email updates from the FCA

You can register to receive email updates on EMIR from us. These include:

  • information on the REFIT implementation timetable
  • alerts when new documents or further guidance are published, and 
  • further details about the process for making notifications and applying for exemptions in the UK

To register to receive updates, email your name and contact details (including email address) to [email protected].

Unsubscribe at any time by emailing ‘unsubscribe’ and your name and email address to the same address. 

Latest EMIR news

See EMIR news for all updates in full.