Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (EMIR) introduces new requirements to improve transparency and reduce the risks associated with the derivatives market. EMIR lays down clearing and bilateral risk-management requirements for OTC derivative contracts, reporting requirements for derivative contracts and uniform requirements for the performance of activities of central counterparties and trade repositories. EMIR shall apply to central counterparties and their clearing members, to financial counterparties and to trade repositories. It shall apply to non-financial counterparties and trading venues where so provided.

Any obligation imposed by EMIR which is to be further developed by means of delegated or implementing acts should be understood as applying only from the date on which those acts take effect.

What are the requirements according to EMIR?

  • counterparties shall clear all OTC derivative contracts pertaining to a class of OTC derivatives that has been declared subject to the clearing obligation;
  • report every derivative contract that they enter to a trade repository;
  • risk-mitigation techniques for OTC derivative contracts not cleared by central counterparties;
  • requirements for trade repositories;
  • requirements for central counterparties, conduct of business rules and prudential requirements of central counterparties.

Notifications and exemptions under EMIR

Financial and non-financial counterparties may need to make a number of notifications and applications for exemptions to the competent authority - National Bank of Slovakia.

Pension scheme arrangements

In relation to pension scheme arrangements referred to in Article 2(10) (c) and (d) the exemption referred to in paragraph 89 (1) of EMIR shall be granted by the relevant competent authority for types of entities or types of arrangements.

Non-financial counterparties

Where a non-financial counterparty takes positions in OTC derivative contracts and those positions exceed the clearing threshold specified by ESMA (Article 10 (1) of EMIR), that non-financial counterparty shall immediately notify ESMA and the competent authority.

Intragroup transactions: clearing exemptions

OTC derivative contracts that are intragroup transactions shall not be subject to the clearing obligation. This exemption shall apply only where two counterparties belonging to the same group have first notified their respective competent authorities that they intend to make use of the exemption for the OTC derivative contracts concluded between each other.

Intragroup transactions: margin requirements exemption

Counterparties wishing to use the exemption from margin requirements for transaction must first apply to its competent authority under Article 11 of EMIR with evidence that it meets the relevant criteria.