Regulation (EU) No 648/2012

ISDA Publishes EMIR Classification Letter

On July 13, 2015, ISDA published a classification letter that will enable counterparties to notify each other of their status for clearing and other regulatory requirements under Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and repositories (EMIR) (Classification Letter).

EMIR imposes a number of regulatory obligations on counterparties in the derivatives market. The application of the EMIR requirements depends on how counterparties are classified. The Classification Letter has been prepared as a bilateral version of the classification tools that currently exist on ISDA Amend and is intended to facilitate compliance with EMIR by allowing counterparties to communicate their status by answering a series of questions. ISDA has published an explanatory memorandum to accompany the Classification Letter.

The clearing categorization in the Classification Letter covers interest rate derivatives only. It is anticipated that the Classification Letter will be expanded in the future to cover other classes of products that may become subject to the clearing obligation.

ESMA Publishes Q&As on EMIR

On August 8, the European Securities and Markets Authority (ESMA) published Questions and Answers on the implementation of Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR).

ESMA’s statutory role is to build a common supervisory culture by promoting common supervisory approaches and practices.  The Q&As were published to achieve a consistent application of EMIR.  The first version of this document was published on March 20, and the second version on June 6.  This document is expected to be updated and expanded as and when appropriate.

This version of the Q&As provides guidance on a number of issues including clarification on calculation of the clearing threshold, the nature of segregation and portability and the requirements for registration of trade repositories.  Q&As.