European Market Infrastructure Regulation (EMIR)

EMIR enhances transparency and reduces risks in the over-the-counter (OTC) derivatives market within the European Union (EU). It establishes robust frameworks for reporting, clearing, and risk management.

• Trade Reporting: Requires derivatives transactions to be reported to authorized trade repositories.
• Clearing Obligations: Mandates central clearing for standardized derivatives contracts.
• Risk Mitigation: Implements measures for non-cleared derivatives, including timely confirmations and collateral management.

• Enacted in 2012, EMIR introduced phased implementation deadlines for reporting, clearing, and risk management obligations.
• Ongoing updates, including EMIR REFIT in 2019, aimed to streamline compliance for smaller entities.

• Financial Penalties: Firms may face significant fines for failing to meet EMIR obligations.
• Operational Disruptions: Non-compliance could result in restricted trading activities.
• Reputational Harm: Breaches in compliance may erode confidence among stakeholders.

• Market Stability: Enhances financial stability through greater transparency and risk reduction.
• Investor Confidence: Builds trust in the EU’s financial markets.
• Global Competitiveness: Aligns EU markets with international best practices.