Negotiators from the European Parliament and the Romanian Presidency of the EU Council reached a provisional institutional agreement on Tuesday 5 February on the revision of the EMIR Regulation, aimed at simplifying European prudential rules for small financial and non-financial entities governing over-the-counter derivatives.
This agreement was signed in December 2018 under the Austrian Presidency of the Council and is the subject of a simple political confirmation on Tuesday, according to a parliamentary source. A technical session of interinstitutional trilogue negotiations will take place on Wednesday with the aim of confirming the provisional agreement next week.
A new category of small financial counterparties will be introduced into European legislation. These counterparties will be exempted from the obligation to clear their transactions through a central counterparty, while remaining subject to risk mitigation obligations.
Similarly, the smallest non-financial counterparties will be subject to reduced clearing obligations.
It will be up to the European Securities and Markets Authority (ESMA) to set the thresholds for identifying small financial counterparties exempt from the clearing obligation and small non-financial counterparties subject to reduced clearing obligations.
Pension funds. The temporary exemption from the clearing obligation of pension scheme arrangements is extended for two years, with the possibility of extending this exemption twice by one year. In favour of this exemption, the Parliament had suggested different durations depending on the size of these funds (see EUROPE 12041).
Concerning the reporting obligation, the Regulation will streamline existing rules in order to improve the quality of reported data and make monitoring more effective. It will remove the requirement to retroactively report historical data '(backloading') as well as intra-group transactions involving non-financial counterparties, according to a Council statement. (Original version in French by Mathieu Bion)