On February 9, it was announced that the European Parliament, the Council of the European Union and the European Commission had reached agreement on the proposed European Market Infrastructure Regulation (EMIR).

The agreement follows lengthy negotiations (as reported in the January 27, 2012 edition of Corporate and Financial Weekly Digest) on various contentious issues.

In the agreed version of EMIR:

  • The central counterparty (CCP) clearing obligation will apply to over-the-counter (OTC) derivatives, whereas the requirement to report trades to trade repositories will apply to all derivatives, not just OTC derivatives.
  • The CCP authorization process will include binding intermediation by the European Securities and Markets Authority (ESMA) between national authorities in any dispute over the CCP authorization.
  • In order for non-EU CCPs to be recognized under EMIR, their home country regulatory framework must provide an effective system for reciprocal recognition of EU CCPs.

Final approval of EMIR by the European Parliament and Council is still required. The European Parliament is due to consider EMIR in its March 12–15 session. Once approved, EMIR will enter into force 20 days after publication in the Official Journal and it will apply from a date in 2013 yet to be established.

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