The EMIR REFIT proposal

The EMIR REFIT proposal

Carolyn Jackson, partner at Katten Muchin Rosenman UK LLP and a P.R.I.M.E. Finance expert, discusses the recently adopted EMIR REFIT proposal including the key changes that it brings about, the benefits and challenges of these changes, and how practitioners can prepare for it coming into force.

What is the EMIR REFIT proposal? 

EMIR REFIT is the culmination of a review of the European Market Infrastructure Regulation (EU) 648/2012 (EMIR) that began in 2015. Article 85(1) of EMIR required the European Commission (the Commission) to review EMIR by August 2015 and to submit a report of its findings to the European Parliament and the Council of the EU. Between May and August 2015, the Commission carried out an extensive assessment of the legislation, which resulted in a report, published in November 2016. The Commission concluded that although there was no need for a fundamental change to the nature of the core requirements of EMIR, amendments could be made to some specific areas to eliminate disproportionate costs and burdens on certain over-the-counter (OTC) derivatives counterparties, as well as to simplify the current rules. 

EMIR was included within the Commission's 2016 Regulatory Fitness and Performance (REFIT) programme which resulted in May 2017 in a proposal from the Commission for a Regulation amending EMIR (EMIR REFIT) to address the costs, burdens and simplification issues it had identified. The Commission published the EMIR REFIT proposal on 4 May 2017. After a number of iterations, the draft text of EMIR REFIT was adopted by the Council of the EU on 14 May 2019, was signed on 20 May 2019 and published in the Official Journal of the European Union on 28 May 2019. EMIR REFIT will therefore enter into force on 17 June 2019.

What are the key changes to EMIR? 

The key changes brought about by EMIR REFIT include: 

FC Definition Amendment

The definition of financial counterparty (FC) has been expanded under EMIR REFIT to capture all EU alternative investment funds (AIFs), irrespective of the location of the alternative investment

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About the author:

Meet Emma:

1.Banking and finance lawyer with experience in derivatives, debt capital markets, securitisation and structured finance in London and Paris

2.Likes ballet, playing the harp and holidays

3.Thinks the law is always changing!

Emma trained and qualified at Allen & Overy LLP and worked in their derivatives and structured finance teams in London and Paris.  She then joined the foreign exchange prime brokerage legal team at Deutsche Bank before spending 4 ½ years with Crédit Agricole CIB advising the fixed income and derivatives desk.