PROPOSED AMENDMENT OF THE EUROPEAN MARKET INFRASTRUCTURE REGULATION

The European Market Infrastructure Regulation (EMIR) was adopted after the financial crisis in 2012, for the purpose of better managing and controlling the financial risks relating to the over-the-counter (OTC) derivatives markets. Following the extensive assessment of EMIR, the Commission proposed amendments thereto on 4 May 2017. The amendments would introduce simpler and more proportionate rules on OTC derivatives by reducing costs and regulatory burdens for market participants, without endangering financial stability.

In order to reduce administrative burdens, reporting requirements would be simplified for all counterparties. The proposal includes modifications with respect to the non-financial counterparties’ (corporates) clearing obligation. The Commission proposes to reduce the burden for non-financial counterparties: they have to clear only the asset classes for which they have breached the clearing threshold. It would also introduce a clearing threshold for small financial counterparties (such as small banks and funds), which means that they would be obliged to clear centrally, only if the volume of the OTC derivatives transactions carried out exceed the threshold.

According to the proposal, a new three-year temporary exemption will be introduced for pension funds from central clearing, which results in that they participate in central clearing without negatively impacting the revenues of future pensioners.