EMIR, derivatives and pensions
Produced in partnership with Jason Brooks and Jason Harding of CMS
EMIR, derivatives and pensions

The following Pensions guidance note Produced in partnership with Jason Brooks and Jason Harding of CMS provides comprehensive and up to date legal information covering:

  • EMIR, derivatives and pensions
  • The European Market Infrastructure Regulation (EMIR)
  • Pension scheme arrangements and EMIR
  • Clearing obligations
  • Reporting
  • Risk mitigation
  • Impact of Brexit

The European Market Infrastructure Regulation (EMIR)

EMIR introduced requirements to improve transparency and reduce risks associated with the derivatives market.

It applies to pension plans and common investment funds, although the various requirements contained in EMIR are being phased in over time.

EMIR entered into force on 16 August 2012, with the majority of provisions applying after the relevant technical standards entered into force. It was amended on 17 June 2019 through Regulation (EU) 2019/834 (known as EMIR Refit).

On 13 March 2019, the European Parliament, the Council of the EU and the Commission reached a political agreement on EMIR 2.2 (EU) 2019/2099, which further amends EMIR as regards the procedures and authorities involved for the authorisation of central counterparties (CCPs) and requirements for the recognition of third-country CCPs). EMIR 2.2 was signed on 23 October 2019 and published in the Official Journal on 12 December 2019. It came into force on 1 January 2019. For further information, see Practice Note: EMIR REFIT and EMIR 2.2 roadmap (subscription dependent).

Main obligations under EMIR

EMIR imposes three main obligations on market participants:

  1. reporting—derivative contracts that are entered into (amended or terminated) will usually have to be reported to a trade repository

  2. risk mitigation—implementation of risk management standards, including operational processes and margining, for all bilateral over-the-counter (OTC) derivatives, ie trades that are not exchange-traded and are