EMIR Refit Regulation – Impact on Asset Managers

13 May 2019
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Key takeaways:
  • The EU legislative process for the review of EMIR (the Regulation on OTC derivative transactions, central counterparties (CCPs) and trade repositories (648/2012)) (the “EMIR Refit Regulation” ) is almost complete, with its entry into force expected shortly.
  • This note focuses on the impact of the EMIR Refit Regulation on non-EU investment managers and funds. By broadening the definition of “Financial Counterparty”, the EMIR Refit Regulation brings into scope EU funds managed by non-EU managers (as EU Financial Counterparties) and, prospectively, non-EU funds managed by non-EU managers (as “hypothetical” EU Financial Counterparties), with the consequence that those funds may be subject to the requirements to exchange margin for their uncleared derivative trades under EMIR.
  • In addition, EMIR introduces a new category of “Small” Financial Counterparties that may exempt EU and non-EU funds from the mandatory clearing obligation.