EMIR

Aviv Handler

The European Market Infrastructure Regulation (EMIR) EU 648/2012 came into force on August 16, 2012, and was applied in stages over the ensuing years. As outlined in Chapter 1, this regulation is part of the EU’s response to the declaration made in Pittsburgh in 2009, aimed at reforming the global derivatives markets to reduce systemic risk. The declaration was made following the financial crisis of 2007/2008, which was allegedly caused by excessive systemic risk, largely arising out of mis-valued and mis-assigned leveraged exposures in derivatives.

The declaration (see Chapter 1) outlined the following key objectives:

• • standardised OTC derivative contracts to be traded on exchanges or electronic trading platforms where appropriate;

• • standardised OTC derivatives contracts to be cleared wherever possible, by 2012;

• • OTC derivative contracts to be reported to trade repositories;

• • non-centrally cleared derivative contracts to be subject to higher capital requirements;

• • improved mitigation of systemic risk; and

• • anti-abuse measures.

Since 2009, each G20 country, and others, have