Regulation (EU) No. 648/2012 (Market Infrastructure Regulation)

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Regulation (EU) No. 648/2012

Title: 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
Designation:
(not official) 		Market Infrastructure Regulation, EMIR Regulation
Scope: EEA
Legal matter: Commercial law
Basis: TFEU , in particular Art. 114
Procedure overview: European Commission
European Parliament
IPEX Wiki
To be used from: August 16, 2012
Reference: OJ L 201 of 27.7.2012, pp. 1-59
Full text Consolidated version (not official)
basic version
Regulation has entered into force and is applicable.
Please note the information on the current version of legal acts of the European Union !

The Regulation (EU) no. 648/2012 (Market Infrastructure Regulation) , long name Regulation (EU) no. 648/2012 of the European Parliament and the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories , is an EU regulation to regulate over-the-counter derivatives trading . With the abbreviation EMIR for the unofficial English name European Market Infrastructure Regulation , the short name EMIR Regulation has also found widespread use. The ordinance regulates the OTC trading with derivatives . The core of the regulation is the obligation of market participants to clear their over-the-counter standard derivative transactions via a central counterparty and to report these transactions to a trade repository. The European Securities and Markets Authority (ESMA) is entrusted with the implementation of the Market Infrastructure Regulation .

history

On September 15, 2008, the US investment bank Lehman Brothers filed for bankruptcy, exacerbating the global financial crisis .

The heads of state and government of the leading industrial nations decided in September 2009 at the G-20 summit in Pittsburgh to make over-the-counter derivatives trading (“OTC derivatives trading”) more transparent and secure. These standardized by the end of 2012. OTC derivatives through central counterparties (English should latest central counterparties ) are expected. For OTC derivative transactions that do not go through central clearing, higher capital requirements should then apply to secure credit . All OTC derivative transactions should be reported to trade repositories . The Financial Stability Board (FSB) has been entrusted with monitoring implementation .

In July 2012, enacted European Parliament and European Council described herein Regulation (EU) no. 648/2012 of the European Parliament and the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories , being implemented by the European Securities and Market surveillance authority (ESMA).

Content of the regulation

The main content of the Market Infrastructure Ordinance is three things:

  1. Clearing obligation: standardized OTC derivative transactions must (English using a central counterparty counterparty central CCP abbreviated) are expected.
  2. Risk management: The contracting parties must also observe special risk management requirements for OTC derivative transactions, which due to their structure are not suitable for central clearing.
  3. Obligation to report: OTC derivative transactions are to be reported to a trade repository .

The following financial instruments in accordance with Directive 2014/65 / EU on markets in financial instruments (Financial Market Directive ) are deemed to be derivatives transactions subject to clearing and reporting requirements ( options , futures contracts , swaps , interest equalization agreements and all other derivative contracts ):

  • Derivative transactions in relation to securities, currencies, interest rates or income, or other derivative instruments, financial indices or metrics that can be effectively delivered or settled in cash;
  • Derivative transactions relating to goods that must be settled in cash or can be settled in cash at the request of one of the parties,
  • Derivative transactions relating to goods that can be effectively delivered, provided that they are traded on a regulated market and / or through an MTF,
  • Other derivative transactions relating to goods that can effectively be delivered, serve non-commercial purposes and have the characteristics of other derivative financial instruments,
  • Derivative transactions for the transfer of credit risks,
  • Financial contracts for differences ,
  • Derivative transactions relating to climate variables, freight rates, emission allowances, inflation rates and other official economic statistics that must be settled in cash or, if one of the parties so wishes, can be settled in cash.

The clearing obligation applies to trading participants from the financial sector (English financial counterparties ) who are subject to financial supervision in the European Union. This includes in particular securities dealers , credit institutions , insurance companies (property and life ), reinsurance companies , investment funds in accordance with the UCITS Directive , pension funds and alternative investment funds in accordance with the AIFM Directive . Trading participants from the non-financial sector (“non-financial counterparties”) should also be subject to EMIR regulation, insofar as this is “expedient”. From a practical point of view, the clearing obligation should apply to those trading participants from the non-financial sector who make extensive use of derivatives that not only serve to hedge the economic risks of their business activities. However, the hedging of risks in direct connection with commercial activities or financing by the treasury of a company can be exempted from the clearing obligation .

The examination of whether a company is subject to clearing obligation must be carried out by all companies that own at least one of the above-mentioned derivatives. For companies from the non-financial sector, clearing thresholds are defined in various classes of derivatives to check whether derivatives are used to a greater extent. Therefore applies

  1. gross face value of EUR 1 billion for OTC credit derivative contracts;
  2. for OTC equity derivative contracts a gross notional value of EUR 1 billion;
  3. for OTC interest rate derivative contracts, a gross notional value of EUR 3 billion;
  4. gross nominal value of EUR 3 billion for OTC foreign exchange derivative contracts;
  5. for OTC commodity derivative contracts and other OTC derivative contracts not provided for under numbers 1 to 4, a gross nominal value of EUR 3 billion.

implementation

The EMIR regulation came into force twenty days after it was published in the EU Official Journal, ie on August 16, 2012. On September 27, 2012, ESMA published the final draft for regulatory (RTS) and technical (ITS) standards as an implementing provision for EMIR. The effects of the regulation on the German financial center cannot yet be definitively foreseen. Apart from technical implementation problems, there are signs that the German financial center will definitely have a competitive effect.

In Germany, the regulation was implemented through the EMIR Implementation Act of February 13, 2013 ( Federal Law Gazette I p. 174 ). The Implementation Act changed the Banking Act , the Securities Trading Act , the Stock Exchange Act , the Insurance Supervision Act , the Investment Act , the Ordinance on the Collection of Fees and the Allocation of Costs according to the Financial Services Supervision Act, the Financial Services Supervision Act , the Financial Market Stabilization Fund Act and the Introductory Act to the Insolvency Code. It came into force on February 16, 2013.

Web links

Individual evidence

  1. ↑ G20 Leaders Statement: The Pittsburgh Summit , September 24-25, 2009, Pittsburgh. (Section Strengthening the International Financial Regulatory System , Article 13, Paragraph 4, Improving over-the-counter derivatives markets ): "All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements. We ask the FSB and its relevant members to assess regularly implementation and whether it is sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse. "
  2. ↑ a b 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 (PDF) . In: Official Journal of the European Union. No. L 201 of July 27, 2012.
  3. ↑ Article 2 No. 5 of Regulation (EU) No. 648/2012 (Market Infrastructure Regulation) refers to “derivatives” or “derivative contracts” in accordance with Annex I, Section C, Numbers 4 to 10 of Directive 2014/65 / EU on markets for Financial instruments .
  4. ↑ Preamble, No. 25, Regulation (EU) No. 648/2012 (Market Infrastructure Regulation).
  5. ↑ Preamble, No. 29, Regulation (EU) No. 648/2012. (EMIR regulation)
  6. ↑ Article 11; Delegated Regulation (EU) No. 149/2013 of the Commission of December 19, 2012 supplementing Regulation (EU) No. 648/2012.
  7. ↑ ESMA (Ed.): Draft technical standards under the Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC Derivatives, CCPs and Trade Repositories . September 27, 2012, ESMA / 2012/600 (PDF; 2.0 MB)
  8. ↑ von Hall, Why EMIR strengthens Germany's financial center, Wertpapiermitteilungen 2013, p. 673ff.