Financial markets - regulation - infrastructure.
The European Market Infrastructure Regulation (EMIR) became law within the European Union in 2012, although certain of its requirements came into force only after a period of delay.
The objective of EMIR is to reduce the risks posed to financial systems from the vast web of over the counter (OTC) derivative transactions and the large contingent credit exposures that may arise as a consequence.
The Regulation is designed to achieve this objective by three significant requirements for:
- Central clearing and margining of standardised OTC derivatives (with certain exemptions for Non-Financial Counterparties)
- Reporting of all derivative transactions to a trade repository
- Risk mitigation measures for all non cleared derivatives including collateral exchange and confirmation and reconciliation procedures
- Buy-side firm
- Central counterparty (CCP)
- Central securities depository (CSD)
- Derivative instrument
- Dual reporting
- European Securities and Markets Authority (ESMA)
- European Union
- Legal entity identifier
- MiFID II
- Over the counter (OTC)
- Pension Scheme Arrangement
- Regulatory Technical Standard (RTS)
- Securities and Exchange Commission (SEC)
- Trade repository
- UK EMIR