European Market Infrastructure Regulation (EMIR)
As a result of the turbulences caused by the global financial crisis, regulators worldwide increasingly focus on derivatives markets. Given the enormous risks posed by the unregulated over-the-counter (OTC)-market, there is a growing recognition that greater transparency in exchange trading significantly contributes to the future stability of the international financial markets. This is where the European Market Infrastructure Regulation (EMIR) comes in.
At the 2009 G20 summit in Pittsburgh, the members' heads of state and government came to the agreement that, by the end of 2012, all standardised derivatives contracts will have to be cleared through central counterparties (CCPs). In addition, large parts of OTC trading will have to be settled on a collateralised basis and reported to central trade repositories. Within the European Union, this objective is implemented through EMIR.
EMIR entered into force in 2012. The obligation to report all derivatives trades to a trade repository became applicable in late 2013. Most European CCPs were authorised as EMIR-compliant CCPs in the first half of 2014. The obligation to use a CCP to clear bilaterally agreed-upon trades has been phased in starting in July 2016.
EMIR: the highlighted parts of the value chain are affected