Discount rate and EMIR: Difference between pages

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1.  
''financial markets - regulation - infrastructure.''


The quoted market return for traded instruments quoted at a discount.  
The European Market Infrastructure Regulation<ref> http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:201:0001:0059:EN:PDF</ref> (EMIR) became law within the European Union in 2012, although certain of its requirements came into force only after a period of delay.


The market discount rate is quoted based on a percentage of the ''maturity amount''.  
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.


(This is different from a yield or interest rate, which is conventionally quoted based on a percentage of the ''starting amount''.) 


The Regulation achieves this object by three significant requirements for:


In the US this is also known as a 'discount yield'.
#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




2.
== See also ==
 
* [[AIFMD]]
Cost of capital.
* [[Buy-side firm]]
 
* [[CCP]]
The yield used to calculate discount factors and present values.
* [[CFTC]]
 
* [[Clearing]]
 
* [[CSD]]
3.
* [[Derivative instrument]]
 
* [[Dodd-Frank]]
The rate used to discount future liabilities of a Defined benefit pension scheme in order to calculate the present value of the liabilities, often for the purpose of comparing them with the market value of the scheme’s assets. 
* [[Dual reporting]]
 
* [[ESMA]]
Historically it was common to use the blended rate of investment return expected on the actual assets in the scheme, but typically now a market rate is used, such as the government bond or AA corporate bond yield for a fixed income security with a similar duration to that of the underlying liabilities.
* [[European Union]]
 
* [[FATCA]]
 
* [[FC]]
4.
* [[Infrastructure]]
 
* [[Know-your-customer]]
In the US, the interest rate that member banks pay the Federal Reserve when the banks use securities as collateral.  The discount rate acts as a benchmark for interest rates issued. 
* [[Legal entity identifier]]
* [[Margining]]
* [[MiFID]]
* [[MiFID II]]
* [[NFC]]
* [[OTC]]
* [[Pension Scheme Arrangement]]
* [[RTS]]
* [[SEC]]
* [[SSR]]
* [[Trade repository]]
* [[UK EMIR]]
* [[UTI]]
* [[WGMR]]


Other central banks also have similar discount rates.


 
===External link link===
== See also ==
[https://www.fca.org.uk/markets/uk-emir UK EMIR - Financial Conduct Authority]
* [[CertFMM]]
* [[Cost of capital]]
* [[Discount]]
* [[Discount basis]]
* [[Discount instruments]]
* [[Discounted cash flow]]
* [[Interest rate]]
* [[Monetary policy]]
* [[Periodic rate]]
* [[Yield]]




===Other links===
===References===
[http://www.treasurers.org/node/8837 Students: Triumph with timelines, The Treasurer, March 2013]
<references />


[[Category:Corporate_finance]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Corporate_financial_management]]
[[Category:Risk_frameworks]]

Revision as of 17:51, 6 January 2022

financial markets - regulation - infrastructure.

The European Market Infrastructure Regulation[1] (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 achieves this object by three significant requirements for:

  1. Central clearing and margining of standardised OTC derivatives (with certain exemptions for Non-Financial Counterparties)
  2. Reporting of all derivative transactions to a trade repository
  3. Risk mitigation measures for all non cleared derivatives including collateral exchange and confirmation and reconciliation procedures


See also


External link link

UK EMIR - Financial Conduct Authority


References

  1. ↑ http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:201:0001:0059:EN:PDF
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