May 28, 2019

Regulation (EU) 2019/834, of European Parliament and of the Council, which amends European Market Infrastructure Regulation, or EMIR, (Regulation No 648/2012) has been published in the Official Journal of the European Union. Regulation (EU) 2019/834 amends EMIR regarding the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for over-the-counter (OTC) derivative contracts not cleared by a central counterparty (CCP), the registration and supervision of trade repositories, and the requirements for trade repositories. Regulation (EU) 2019/834 will enter into force 20 days after its publication in the Official Journal of the European Union.

The regulation introduces a new category of "small financial counterparties," which will be exempted from the obligation to clear their transactions through a CCP, while remaining subject to risk-mitigation obligations. Smaller non-financial counterparties will also have reduced clearing obligations. In addition, the amendment extends by another two years (further extendable twice by an additional year) the temporary exemption from the clearing obligation of pension scheme arrangements. The updated rules also streamline the existing reporting obligations to improve the quality of the data reported, make the supervision more effective, and increase access to clearing by removing the existing unnecessary obstacles. All of this translates into simplified rules for non-financial counterparties, small financial counterparties, and pension funds using financial derivative products.

Regulation (EU) 2019/834 shall apply from the date of entry into force, except for the following:

  • Provisions set out in points (10) and (11) of Article 1 of Regulation (EU) 2019/834, as regards Articles 38(6) and (7) and 39(11) of EMIR, shall apply from December 18, 2019.
  • Provisions set out in point (7)(b) of Article 1 of Regulation (EU) 2019/834, as regards Article 9(1a) to (1d) of EMIR, shall apply from June 18, 2020.
  • Provisions set out in points (2)(b) and (20) of Article 1 of Regulation (EU) 2019/834, as regards Articles 4(3a) and 78(9) and (10) of EMIR, shall apply from June 18, 2021.

 

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Effective Date: June 17, 2019

Keywords: Europe, EU, Banking, Securities, Pension Funds, OTC Derivatives, EMIR, Reporting, CCPs, Clearing Obligation, Capital Markets Union, European Council, European Parliament

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