European Market Infrastructure Regulation (EMIR)

The European Markets Infrastructure Regulation (648/2012) (EMIR) implements the 2009 G20 agreements on over-the-counter (OTC) derivatives clearing in the EU.

EMIR applies to all entities that enter into any form of derivative contract, including those not involved in financial services. The Regulation also applies indirectly to non-EU firms trading with EU firms.

EMIR establishes a clearing obligation for certain derivative (e.g. credit, equity, FX, etc.) trades. The identity of the counterparties and the type of derivative contract being traded determines whether or not the trade must be cleared through a central counterparty (CCP).

EMIR creates a reporting requirement that means entities that enter into any form of derivative contract (including interest rate, FX, credit, equity, and commodity derivatives) must report that contract to a trade repository.

EMIR implements new risk mitigation standards, including operational processes and margining, for all OTC derivatives trades which are not centrally cleared (i.e. the class of derivative is not subject to the clearing obligation or the counterparties to the trade do not fall within the scope of the clearing obligation).

EMIR establishes registration and supervision requirements for central counterparties, as well as for trade repositories.

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Status:

EMIR entered into force 16 August 2012, but some provisions are yet to enter into effect. The first clearing obligations for certain interest rate derivatives apply as of 21 June 2016.The reporting requirement came into effect 12 February 2014, applicable to all types of derivatives contracts. Various margin requirements for uncleared trades apply as of 1 September 2016 for major market participants. Initial margin requirements are to be phased in from 1 September 2016.

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Future Dates

* Estimated date

  • 1 December 2019

    End of four-year transitional period for RTS on risk-mitigation techniques for OTC derivatives contracts not cleared by a CCP under EMIR.

  • *31 December 2020

    End of the transition period for implementing the margin requirements for non-centrally cleared derivatives (as set out by the Basel Committee on Banking and IOSCO).