EMIR Refit


EMIR Refit – ESMA clarifications on scope, live expected target date end of May 2019

29 Mars 2019

Regulatory News Alert

Context and objectives

After a series of negotiations on the EMIR Refit (Regulatory Fitness and Performance ) proposal, a political agreement was reached on 5 February 2019 between the European Parliament and EU member states on the targeted EMIR reform, to address disproportionate compliance costs, transparency issues and insufficient access to clearing for certain counterparties.

Following this agreement, it is thus reasonable to expect that the final Refit text could be adopted and published in the Official Journal as early as May 2019 and thus could enter into force as early as end of May 2019, i.e. 20 days after its publication.

Clearing obligations under Refit regime

EMIR Refit includes a new regime to determine when financial and non-financial counterparties are subject to the clearing obligation, depending on whether their positions exceed certain thresholds (as defined by asset class and set in Commission Delegated Regulation No 149/2013).

In accordance with the ESMA statement published on 28 March 2019, counterparties can choose whether or not to conduct the calculation in order to establish if they are subject to Refit clearing obligation.

In this regard, ESMA clarifies that counterparties will be required to clear their OTC derivative positions and immediately notify ESMA and the relevant competent authority if:

  • They choose not to do timely calculations once Refit enters into force
  • The result of that calculation exceeds the clearing thresholds

Implications for entities in scope

As Refit, in its currently proposed form, does not include a delayed implementation of the new regime, counterparties choosing to conduct the calculation would need to have the results by the day of Refit entering into force, i.e. potentially as early as end of May.

From the day of the first calculation onwards, counterparties taking positions in OTC derivative contracts and choosing to calculate their aggregate month-end average position are required to conduct that calculation every 12 months.

How Deloitte can help you?

Since its entry into force, we have been helping our clients to comply with EMIR provisions by providing assistance on activities ranging from strategic considerations to the full implementation of its requirements.

Deloitte Luxembourg EMIR Services can help your organization analyze the current gaps with regulatory health checks, propose remediation plans, and define the appropriate governance framework (contracts, risk management, and control).

Deloitte Luxembourg can help you in your reporting with its reporting facility for EMIR, MIFIR and upcoming SFTR.

With our RegWatch service, Deloitte helps you stay on top of regulatory news and prepare your organization to address future regulatory developments.

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Laurent Collet
Partner – Strategy, Regulatory & Corporate Finance
Tel : +352 45145 2112

Kevin Demeyer
Senior Manager – Strategy, Regulatory & Corporate Finance
Tel : +352 45145 3808

Benoit Sauvage
Director – RegWatch,
Strategy & Consulting
Tel : +352 45145 4220

Marijana Vuksic
Manager – Strategy, Regulatory & Corporate Finance
Tel : +352 45145 2311

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