On 19 November 2012, the European Securities & Markets Authority (‘ESMA’) published ‘EMIR: Frequently Asked Questions’, which is “designed to provide clarity” in relation to the European Market Infrastructure Regulation (‘EMIR’).

The FAQ will be maintained by ESMA, with new questions and answers added from time to time. Please see below for details on how to submit a question to them. Please note that this information is not legally binding; as the FAQ boilerplate warns, “only the Court of Justice of the EU can give an authoritative interpretation of Union legislation.”

The EMIR FAQ covers (1) the timing of implementation; (2) the scope of the Regulation; and (3) matters concerning third country central counterparties (‘CCPs’) and trade repositories (‘TRs’). The first two sections are summarised below.

Timing of Implementation: “When do the obligations under EMIR take effect?”


EMIR was adopted on 4 July 2012.

EMIR came into force on 16 August 2012, except for “the obligations under the provisions of EMIR that need to be specified further via regulatory and/or implementing technical standards” (‘RTS’ and ‘ITS’) – which include clearing and reporting obligations, and additional collateral requirements for non-centrally cleared OTC derivatives contracts.

The requirement for risk mitigation techniques for non-centrally cleared OTC derivatives contracts began to apply to such OTC derivatives contracts entered into, on or after 16 August 2012. Until further RTS are issued to provide additional detail on this point, “counterparties have the freedom to apply their own rules on collateral in accordance with the conditions laid down in [EMIR] Article 11(3)” (which only refers to “timely, accurate and appropriately segregated exchange of collateral”).

We note that, although the reporting obligation has not yet come into effect, when it does, OTC derivatives contracts entered into, on or after 16 August 2012 will need to be reported, even if they have since been terminated.

ESMA submitted its first set of RTS and ITS to the European Commission (‘EC’) on 27 September 2012.
The EC adopted these without modification on 19 December 2012.


The ITS will be published in the Official Journal ”right after” their adoption, and will enter into force 20 days after publication. However, as the ITS only contain technical provisions to complement the RTS, in practice nothing will actually change on this date.

The RTS will be sent to the European Parliament and the Council of the EU until 19 January 2013 (or until 19 February 2013 on application for extension).

If the European Parliament and the Council of the EU have no objections, the RTS will be published in the Official Journal, and enter into force 20 days after publication.

Assuming the above all goes to plan, the majority of RTS and ITS would enter into force in the first quarter of 2013, except the additional collateral requirements, and the definition of third country contracts that are subject to EMIR through having a “direct, substantial, and foreseeable effect within the Union”. Please see below for specific details about when the clearing and reporting obligations come into force.

Within six months of the RTS and ITS entering into force, CCPs providing clearing services must apply for authorisation or (for third country CCPs) recognition. Existing CCPs can continue to operate during the interim period.

Within six months of a CCP being authorised or recognised, EMIR will determine whether the classes of OTC derivatives contracts that the CCP is able to clear should be subject to the clearing obligation. At the same time, ESMA will decide the date on which the clearing obligation comes into force for that class of OTC derivatives contracts. ESMA expects to begin making these assessments in the first quarter of 2013, with the first clearing obligations entering into force soon after.

The reporting obligation will be phased-in over time, based on asset class, and whether or not there is a trade repository authorised for that class yet:

Derivative class

Trade repository authorised for that class? When?

Reporting obligation start date:


Yes; TR registered before 1 April 2013

1 July 2013

As above

Yes; TR registered between 1 April 2013 and 1 July 2015

90 days after a TR is registered for that class

As above

No TR registered by 1 July 2015

1 July 2015 (contracts reported to ESMA)

All other OTC derivatives

Yes; TR registered before 1 October 2013

1 January 20141

As above

Yes, TR registered between 1 October 2013 and 1 July 2015

90 days after a TR is registered for that class**

As above

No TR registered by 1 July 2015

1 July 2015** (contracts reported to ESMA)

Scope of EMIR: Other Frequently Asked Questions

Derivatives: “Are energy spot transactions within the scope of EMIR?”

Energy derivatives are covered by EMIR, although energy spot transactions are not, as they are not financial instruments as defined by the Markets in Financial Instruments Directive (‘MiFID’).

Structures: “Are Special Purpose Vehicles (SPVs) covered as non-financials?” “Are pool structures subject to the clearing and risk mitigation obligations?”

Special Purpose Vehicles (‘SPVs’) will be classed as non-financial counterparties if they do not fall into the definition of ‘financial counterparty’ in EMIR Article 2(8)2.

Pool structures will be ‘indirectly’ subject to EMIR, because the investment fund whose assets are pooled – the legal counterparty to the OTC derivatives contract – is subject to EMIR.

Reporting: “[W]ho is legally accountable when the reporting … is delegated to a third party?” “May delegation of reporting be assigned to a TR or CCP …?” “Do counterparties and/or CCPs need to agree on the report’s contents … ?” “Are details of a contract the same as the contract terms?”

A counterparty subject to the reporting obligation remains legally accountable for reporting, even if they delegate reporting.

There are no specific rules about third parties reporting on a counterparty’s behalf. TRs and CCPs can act as delegates.

Counterparties need to agree on the contents of a report before submitting it.

The need to report all OTC derivatives contract details does not necessarily mean reporting all contract terms. The precise details to be reported will be specified in the RTS and ITS.

Intragroup exemptions: “When can counterparties start applying for the intragroup exemption?” “Are intragroup transactions excluded from the calculation of the clearing threshold?”

Counterparties can start applying for intragroup exemptions when “the technical standards relevant to the intragroup exemptions enter into force”. The RTS and ITS specify the details of intragroup OTC derivative contracts to be provided to the regulators; the precise criteria for applying the exemption are still being worked on between ESMA, the European Banking Authority and the European Insurance and Occupational Pensions Authority. The actual application process is also still under development.

Intragroup transactions will still count towards the clearing threshold for non-financial counterparties, unless they fall within the Article 10(3) EMIR exemption for OTC derivatives contracts entered into by non-financial counterparties for the purpose of “reducing risks directly relating to the commercial activity or treasury financing activity” (e.g., hedges).

1. “’financial counterparty’ means an investment firm authorised in accordance with Directive 2004/39/EC, a credit institution authorised in accordance with Directive 2006/48/EC, an insurance undertaking authorised in accordance with Directive 73/239/EEC, an assurance undertaking authorised in accordance with Directive 2002/83/EC, a reinsurance undertaking authorised in accordance with Directive 2005/68/EC, a UCITS and, where relevant, its management company, authorised in accordance with Directive 2009/65/EC, an institution for occupational retirement provision within the meaning of Article 6(a) of Directive 2003/41/EC and an alternative investment fund managed by AIFMs authorised or registered in accordance with Directive 2011/61/EU”

2. Or whichever of these is the earlier