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 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. EMIR also establishes common organisational, conduct of business and prudential standards for central counterparties (CCPs) and trade repositories.
EMIR 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, ie trades that are not cleared by a CCP
- clear, via a CCP, those OTC derivatives subject to a mandatory clearing obligation
High-level implementation timetable (reverse order)
|1 Mar 2017||Variation margining requirements for non-centrally cleared trades will apply for all other institutions that are within scope.|
4 Feb 2017 - 1 Sept 2020
|Initial margining requirements for non-centrally cleared trades will apply from 4 February 2017 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.|
|4 Feb 2016||Variation margining requirements for non-centrally cleared trades will apply for the largest institutions.|
|11 Aug 2014||Financial counterparties/NFC+s are required to provide daily reports on mark-to-market valuations of positions and on collateral value.|
|10 Apr 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.|
|18 Mar 2014||The first CCP was authorised under EMIR.|
|12 Feb 2014||Details of all classes of derivative contract (both OTC and ETD) are required be reported to recognised trade repositories.|
|15 Sep 2013||Risk management of non-cleared OTC derivatives through portfolio reconciliation, dispute resolution and trade compression will apply.|
|15 Mar 2013||
All legal and contractual terms of non-centrally cleared OTC derivative contracts must be confirmed between counterparties within specified timelines.
Non-financial counterparties exceeding the clearing threshold are required to notify the FCA.
The technical standards on OTC Derivatives, Reporting to Trade Repositories and Requirements for Trade Repositories and Central Counterparties entered into force.
|16 Aug 2012||EMIR entered into force, but most provisions only apply after technical standards enter into force.|
Implementation dates are subject to change depending on the progress of EU implementation.
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- 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
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Latest EMIR news
See EMIR news for all updates in full.
Statement from the Treasury on the implementation of the EMIR Regulatory Fitness and Performance (REFIT) programme and the clearing exemption for UK and EEA Pension Scheme Arrangements
On 21 February 2019, the Treasury published a statement on the implementation of EMIR REFIT and the clearing exemption for UK and EEA Pension Scheme Arrangements (PSAs).
In amending UK law to incorporate the EU exemption from the clearing obligation for PSAs under EMIR REFIT, the Treasury intends for this exemption to apply to both UK and EEA PSAs.
Because of these expected changes to UK legislation, we will not prioritise actions that require UK counterparties to put in place arrangements to centrally clear their OTC derivative trades with UK and EEA PSAs, where they would be expected to benefit from the exemption to the clearing obligation proposed by the Treasury. Similarly, we will not prioritise actions that require UK counterparties to put in place arrangements to trade their OTC derivative trades with UK and EEA PSAs on trading venues under the MiFIR trading obligation, where they would be expected to benefit from the exemption to the clearing obligation proposed by the Treasury.
This approach is subject to any further statements that we may issue.
|7 February 2019||
ESMA updates EMIR Q&A on reporting requirements
On 4 February 2019, the European Securities and Markets Authority (ESMA) issued an update of its Q&A on practical questions regarding the reporting requirements under the European Market Infrastructure Regulation (EMIR). The reporting Q&A has been amended to provide clarification in the following areas:
|7th February 2019||
ESMA statement on the clearing and trading obligations for small financial counterparties and the backloading requirement for reporting entities
On 31 January 2019, the European Securities and Markets Authority (ESMA) published a statement on the clearing and trading obligations for small financial counterparties (SFCs) and the backloading requirement for reporting entities.
Under the European Market Infrastructure Regulation (EMIR), the effective date of the clearing obligation for Category 3 counterparties is 21 June 2019, for the interest rate and credit derivative classes subject to the clearing obligation. EMIR Refit is expected to create a new category of financial counterparties (small financial counterparties), which will be exempted from the clearing obligation. It is expected a large subset of SFCs would be Category 3 firms. In addition, the Markets in Financial Instruments Regulation (MiFIR) exempts financial counterparties, temporarily exempted under EMIR from the clearing obligation, from the trading obligation for derivatives. This would include SFCs, however with the expiration of the current Category 3 clearing obligation phase-in under EMIR, SFCs would be subject to the trading obligation under MiFIR for the relevant OTC derivative contracts.
ESMA and national competent authorities have also been made aware of the operational challenges for reporting entities in complying with the EMIR backloading requirement of reporting derivative trades that were outstanding on or after 16 August 2012 and terminated before the EMIR reporting start date, 12 February 2014. EMIR Refit proposes to remove the backloading requirement from Article 9 of EMIR, due to take effect on 12 February 2019.
Given the amendments to EMIR Refit on the clearing and trading obligations for SFCs, and on the backloading requirement, are unlikely to enter into force before 21 June 2019 and 12 February 2019 respectively, ESMA expects competent authorities to apply their supervisory powers in a proportionate manner.
The FCA will not require firms expecting to benefit from the SFCs exemption from the clearing obligation to start putting processes in place to clear derivatives by 21 June 2019. In addition, given that MiFIR exempts financial counterparties that are temporarily exempted under EMIR from the clearing obligation from the trading obligation for derivatives, we will also not require SFCs to establish processes to comply with the trading obligation before 21 June 2019. We, in any event, continue to recognise that the clearing of derivatives is a prudent risk management tool. Finally, we will not expect reporting entities to prioritise the backloading requirement ahead of the deadline of 12 February 2019.
This approach is subject to any further statements that may be issued by the FCA.
|20 November 2018||
ESMA publishes draft Regulatory Technical Standards on the clearing obligation for contracts novated from UK to EU entities in a no-deal scenario
On 8th November 2018, ESMA published a Final Report with draft Regulatory Technical Standards (RTS) with proposals to amend the 3 EMIR RTS on the clearing obligation.
ESMA's draft RTS propose to exempt from the clearing obligation both legacy OTC uncleared contracts and contracts for which the clearing obligation has not yet taken effect, and that are novated out of the UK into the EU following the UK's withdrawal. This proposed exemption would create a 12-month window for contracts between UK and EU counterparties to be relocated to the EU27 without triggering the clearing obligation. The draft RTS would only apply if the UK leaves the EU without the conclusion of a withdrawal agreement.
The draft RTS have been submitted to the European Commission for endorsement and will be subject to the scrutiny of the European Parliament and of the Council.
ESMA also stated that they, alongside the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA), are currently considering a similar approach to facilitate the novation of legacy contracts to EU counterparties considering that novation may also trigger the application of bilateral margin requirements.
|ESMA press release|
|9 August 2018||
ESMA statement on clearing for pension scheme arrangements extended to include the MiFIR trading obligation
In the original statement, ESMA explains that it is aware of the difficulties that PSAs will face during the timing gap between the expiry of the current EMIR clearing exemption on 16 August 2018 and the day on which EMIR Refit comes into force. ESMA has extended the statement to acknowledge the difficulties that PSAs trading certain OTC derivative contracts will also face during this time, to meet the trading obligation under Markets in Financial Instruments Regulation (MiFIR).
We support ESMA’s amended statement. As with the clearing obligation, we will not require PSAs and their counterparties to start putting processes in place to trade their OTC derivative contracts on trading venues, which they are currently exempt from under MiFIR, during such a timing gap. This approach is subject to any further statements that may be issued by ESMA or the FCA.
Updated ESMA statement (8th August)
ESMA statement (3rd July)
|25 July 2018||
ESMA updates EMIR Q&As on reporting
On 12 July 2018, the European Securities and Markets Authority (ESMA) published an update to its Q&A in relation to the reporting requirements under the European Market Infrastructure regulation (EMIR).
This update provides further clarity on the following areas:
|25 July 2018||
ESMA consults on extending the derogation for EU to third-country EMIR intragroup clearing exemptions
On 11 July 2018, the European Securities and Markets Authority (ESMA) published a consultation paper on the clearing obligation under EMIR. In the Paper, ESMA proposes a draft amending Regulatory Technical Standard (RTS) regarding the treatment of intragroup transactions between EU and third country group entities. As no third-country equivalence determination has been made in relation to the EMIR intragroup clearing exemption regime, ESMA proposes to extend to December 2020 the current derogation provided for these transactions in the absence of the relevant equivalence decisions. The consultation is open until 30 August 2018.
|6 July 2018||
ESMA statement on clearing obligation for pension scheme arrangements
On 3 July 2018, the European Securities and Markets Authority (ESMA) published a statement on the clearing obligation for pension scheme arrangements (PSAs) under EMIR.
In its statement, ESMA explains that it is aware of the difficulties that PSAs will face during the timing gap between the expiry of the current EMIR clearing exemption on 16 August 2018 and the day on which EMIR Refit comes into force.
ESMA also set out its expectations that competent authorities would not prioritise supervisory actions in respect of the clearing obligation towards entities that are expected to be exempted again in a relatively short period of time and to generally apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in a proportionate manner.
We support ESMA’s statement. Accordingly, we will not require PSAs and their counterparties to start putting processes in place to clear derivatives for which they are currently exempt from clearing under EMIR during such timing gap. This approach is subject to any further statements that may be issued by ESMA or the FCA.
We, in any event, continue to recognise that the clearing of derivatives is a prudent risk management tool.
|20 April 2018||
ESMA guidelines on position calculation for Trade Repositories
On 27 March 2018, the European Securities and Markets Authority (ESMA) published guidelines on how trade repositories (TRs) should calculate derivative positions under the European Market Infrastructure Regulation (EMIR).
The Guidelines set out a consistent approach for the calculation of derivative positions by European TRs. There are currently eight TRs registered under EMIR.
Calculation of positions in derivatives is crucial for the assessment of systemic risks to financial stability by allowing the NCAs to have a comprehensive sight of derivatives’ exposures.
The guidelines will become applicable on 3 December 2018.
|12 February 2018||
European Commission equivalence decision under EMIR for derivatives transactions in the United States – Intragroup exemptions
On Friday 13 October 2017, the European Commission adopted an implementing act determining the United States to be equivalent to the European Market Infrastructure Regulation (EMIR) in terms of the legal, supervisory and enforcement arrangements for non-centrally cleared over-the-counter (OTC) derivatives transactions. In particular, the decision concludes that Commodity Futures Trading Commission (CFTC) rules on risk monitoring and mitigation for OTC derivative contracts not cleared by a central counterparty are equivalent to EMIR.
The European Commission have now confirmed to us, other NCAs and ESMA that this equivalence determination does include intragroup exemptions under Article 11(8) and 11(9) of EMIR. This means that the temporary intragroup exemptions which we granted for trades between UK and US firms technically expire on 2 March 2018, that is four months after the coming into effect of the Commission’s equivalence decision on the US. However, the positive equivalence determination also allows firms to apply for exemptions with no expiry date.
To avoid unnecessary administrative burden on firms, we have decided to adopt a streamlined process for firms wishing to apply for these new exemptions. UK firms who currently benefit from the derogation under the Margin RTS with US group entities covered by the equivalence decision must:
|7 December 2017||
Variation margin requirements under EMIR for physically settled FX forwards
On 24 November 2017, the European Supervisory Authorities (ESAs) issued a statement on the variation margin requirements under EMIR for physically settled FX forwards. They confirmed they are in the process of reviewing, and proposing amendments to, the Regulatory Technical Standards (RTS) on risk mitigation techniques for OTC derivatives not cleared by a central counterparty. The ESAs indicated that the changes will look to align the treatment of physically settled FX forwards with the supervisory guidance applicable in other jurisdictions.
We support the ESAs’ statement. They recommend competent authorities “generally apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in a proportionate manner”.
The amendments to the RTS should become increasingly clear over time and we would expect firms to make their plans as a result. Although how they will be amended is not completely clear at this time, the proposals as outlined in the ESAs’ statement can be used by firms as an indication of what the amended requirements may look like.
Accordingly, we will not require firms whose physically settled FX forwards are likely to be outside the scope of the amended requirements to continue putting processes in place to exchange variation margin. This approach is subject to any further statements that may be issued by the ESAs or the FCA.
We, in any event, continue to recognise that the exchange of variation margin is a prudent risk management tool.
3 February 2017
Margin requirements for uncleared derivatives - video guides
The margin requirements under EMIR for over the counter (OTC) derivative contracts not cleared through a central counterparty take effect on 4 February 2017 for larger firms (those with a group average aggregate notional amount above EUR 3 trillion) and 1 March 2017 for all other firms in scope. In order to assist firms with implementation, we have produced two videos.
In the first video, we provide a more in-depth overview of the margin requirements under EMIR, giving details on implementation timing and scope and what firms need to do in order to meet the requirements.
In the second video, we provide an overview of the intragroup exemptions that are available from the margin requirements and the application process firms are expected to follow in order to benefit from this exemption.
19 September 2016
Bank of England authorises ICE Clear Europe Limited as a Central Counterparty under EMIR
On 19 September 2016, the Bank of England updated its list of UK authorised central counterparties (CCPs) to include the authorisation of ICE Clear Europe Limited. ESMA also added ICE Clear Europe Ltd to its list of authorised CCPs under the European Markets Infrastructure Regulation (EMIR).
EMIR requires CCPs to be authorised by a college of supervisors in order to offer CCP services in the European Union. Once a CCP has been authorised or recognised within the EU, EU firms can use these CCPs to fulfil their clearing obligations (the public register for the clearing obligations under EMIR is available on ESMA's website).
|9 September 2016||
ESAs reject proposed amendments from the European Commission to technical standards on non-centrally cleared OTC derivatives
On 9 September 2016, the European Supervisory Authorities (EBA, EIOPA and ESMA ("ESAs")), published an Opinion addressed to the European Commission (EC). The Opinion expresses the views of the ESAs on the EC's proposed amendments to the final draft Regulatory Technical Standards ("RTS") on risk mitigation techniques for OTC derivatives not cleared by a central counterparty. The draft RTS were submitted by the ESAs to the EC in March.
In particular, following the Commission's communication on 28 July 2016, expressing its intention to endorse the ESAs' final draft RTS with amendments, the ESAs' Opinion rejects some of the proposed amendments.
The Opinion and accompanying press release can be found on the ESAs' website.