EMIR nears the finish line

The European Market Infrastructure Regulation (EMIR) entered into force on 16 August 2012, with the final text of the Regulation having been published on 27 July 2012 in the Official Journal of the European Union.  Although most of the obligations under EMIR will not take effect until next year, market participants should become increasingly focused on the impact of the Regulation on their businesses.   
The technical standards, which provide many of the key details regarding how EMIR will apply in practice, are also nearing the finish line, with the European Securities and Markets Authority (ESMA) last week publishing the responses received to its 25 June 2012 consultation on proposed technical standards.  ESMA must now submit final technical standards to the EU Commission by 30 September 2012, after which the Commission will have three months within which to adopt final technical standards. The draft technical standards aim to:

• define the framework for the application of the clearing obligation;
• specify the risk mitigation techniques for over-the-counter derivatives that are not centrally cleared;
• lay down the requirements for the application of exemptions to non-financial counterparties and intragroup transactions;
• establish a comprehensive set of organisational, conduct of business and prudential requirements for central counterparties;
• specify the details of derivatives transactions that need to be reported to trade repositories; and
• define the data that must be made available to relevant authorities by trade repositories. 

This briefing discusses some of the main points of the 25 June ESMA consultation paper.  Please see our March 2012 briefing on EMIR for more information on the Regulation.  Please see our updated timeline detailing key dates related to the EMIR implementation process.