European Commission to Further Assess Issues on Implementation of the European Market Infrastructure Regulation

The European Commission published a Report assessing the issues arising from the implementation of the requirements of the European Market Infrastructure Regulation. EMIR imposes reporting and clearing obligations, risk mitigation techniques for derivatives that are not cleared and requirements on CCPs and trade repositories. The Report summarizes the issues that stakeholders and market participants have raised in response to the Commission's public consultation on EMIR, as well as input from EU authorities such as the European Securities and Markets Authority. The Report does not propose any legislative changes but sets out particular areas where future legislative amendments might be needed or which are to be studied further. The Commission is proposing a legislative review of EMIR in 2017.

Issues that will be further considered by the Commission include more transparency from CCPs on margin requirements, the possibility of national regulators endorsing initial margin models, streamlining reporting requirements and improving the functioning of trade repositories and alternative methods for accessing of data held by trade repositories outside of the EU. The scope of EMIR will also be considered, including assessing whether:

-    transactions entered into before the clearing obligation takes effect should be within scope;
-    intragroup transactions should be subject to the risk mitigation requirements;
-    the exemption for pension schemes should be prolonged or made permanent; and 
-    all non-financial counterparties should be subject to the clearing and margin requirements given the      significant challenges NFC are facing in trying to comply. 

The Commission is proposing to amend EMIR so that a clearing obligation can be suspended by it on request from a national regulator. The proposal is included in the proposed CCP Recovery and Resolution Regulation, published on November 28, 2016, and is only in the context of the resolution of a CCP. The possibility of extending the scope of the suspension of a clearing obligation for other appropriate purposes remains under consideration. 

View the EMIR Report.