On Tuesday 12 June, the European Parliament reached its negotiating position with the Council of the EU on the revision of the 'EMIR' regulation, which governs transactions in derivative financial products in the EU, to reduce the administrative burden on non-systemic operators (see EUROPE 11781).
Under the agreement reached between the political groups, small financial companies that are counterparties in a transaction in over-the-counter derivatives would be exempted from the obligation to clear the transaction in a central counterparty (CCP) if their volume of 'OTC' derivatives trades is too low to represent a systemic risk. This is also to ensure that clearing in a CCP is economically viable.
Non-financial counterparties, which are less interconnected and frequently active in just one category of 'OTC' derivatives, should be subject to a clearing obligation only above certain thresholds, to be set by the European Securities and Markets Authority (ESMA).
We support the objective of a reform aiming to make the legislation “simpler and more effective”, in particular for non-financial counterparties whose principal activity is not financial investment, said Werner Langen (EPP, Germany).
Parliament approves the prolongation of the temporary clearing exemption for pension funds. This exemption will be for two years (renewable for one year) for most entities, or three (renewable for two years) for smaller entities less exposed to risk.
Parliament/Council negotiations will launch in the second half of 2018. (Original version in French by Mathieu Bion)