Do I need to comply with both the UK rules and Emir?
This means that compliance with only one set of rules is required (i.e. the EMIR risk mitigation rules or the equivalent Third Country’s risk mitigation rules). If no equivalence decision is made in respect of the UK, then parties to transactions may be required to comply with both the relevant UK rules and EMIR.
What are the requirements for clearing OTC derivatives under Emir?
Article 4 of EMIR requires that counterparties clear all OTC derivatives falling within a class designated for clearing under EMIR (the Clearing Obligation) which is entered into between: an FC+ or NFC+ and an entity established in a Third Country that would be an FC+ or NFC+ if it were established in the Union; and
What are the different types of counterparties under Emir?
EMIR divides counterparties to OTC derivative contracts into ” Financial Counterparties ” (or FCs) and ” Non-Financial Counterparties ” (or NFCs ). ” Financial counterparties ” are, essentially, Union-regulated entities (or entities managed by Union-regulated managers) in the financial services, funds and insurance sectors.
What is the European market infrastructure regulation (Emir)?
The European Market Infrastructure Regulation (EMIR) sets out requirements for the clearing of OTC derivatives through authorised central counterparties (CCPs), collateral exchange and risk mitigation requirements for non-cleared derivatives, as well as post-trade reporting requirements for all OTC derivatives.
How do I report derivatives transactions within Emir?
All derivatives transactions within the scope of EMIR must be reported to an EEA trade repository registered with ESMA or a third-country trade repository recognised by ESMA. As the Brexit transition period has ended, UK trade repositories are no longer recognised for this purpose.
Can UK clearing houses clear derivatives transactions subject to the Emir?
In the absence of such recognition, UK clearing houses cannot be used to clear derivatives transactions which are subject to the EMIR clearing obligation.
What is a first clearing threshold notification under Emir?
All UK FCs and UK NFCs that exceed the clearing thresholds (or that have chosen not to calculate whether or not they exceed such thresholds) must make a “first” clearing threshold notification to the FCA on or after 1 January 2021, whether or not they have already made such a notification to the FCA under EMIR.