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Implementing EMIR: the storm before the calm 

May 23, 2014
Atma Dhariwal, FTSE Global Markets

The European Market Infrastructure Regulation (EMIR) is the European Union ruling on derivatives, central counterparties (CCPs) and trade repositories. The regulation introduces new requirements to improve transparency and reduce the risks associated with the derivatives market, in addition to establishing common organisational, conduct of business and prudential standards for CCPs and trade repositories. Atma Dhariwal, principal consultant, CCL looks at the market implications of EMIR implementation.

EMIR imposes requirements on all entities that enter into any form of derivative contract, including those not involved in financial services, including non-EU firms trading with EU firms. From February 12th this year, all counterparties were required to report details of derivative contracts (OTC and exchange traded) they have concluded, or which they have modified or terminated, to a registered or recognised trade repository (TR).

Under EMIR, both sides of a derivative deal have to report, rather than just the sell-side as Dodd-Frank requires. This means that technology changes are required for all market participants, including buy-side investment firms, counterparties, delegated reporting third parties and the trade repositories themselves. It requires not only build out, individual solutions but also inter-operability between the various parties involved and it is clear that many firms are still not ready

Read more: FTSE Global Markets

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