The impact of EMIR on funds
The impact of EMIR on funds

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • The impact of EMIR on funds
  • EU EMIR—key requirements
  • Brexit—onshoring of EU EMIR
  • Who is the counterparty?
  • How is a counterparty categorised?
  • Alternative investment funds and UCITS
  • Fund manager
  • Other funds and pooled vehicles
  • Third country funds
  • What are a fund or fund manager counterparty’s obligations?
  • More...

In each section of this Practice Note, links are given to the relevant provisions of EU and/or UK legislation, as applicable, and significant divergence between relevant EU and UK legislation is explained.

EU EMIR—key requirements

The European Market Infrastructure Regulation (EU) 648/2012 (OJ L 201/1) (EU EMIR) is the principal EU measure regulating the over the counter (OTC) derivatives market. Its key elements are:

  1. a requirement to clear standardised OTC derivatives through a central counterparty (CCP)—see Clearing

  2. a requirement to report derivative contracts to a trade repository (TR)—see What are a fund or fund manager counterparty’s obligations?

  3. margin requirements for non-centrally cleared OTC derivatives—see What are a fund or fund manager counterparty’s obligations?, and

  4. additional risk mitigation requirements for uncleared trades, including timely confirmation, portfolio reconciliation, portfolio compression and dispute resolution—see Additional risk mitigation requirements

Brexit—onshoring of EU EMIR

HM Treasury established a process under the European Union (Withdrawal) Act 2018 (EU(W)A 2018) for domesticating EU law to ensure legal continuity following the UK’s exit from the EU. EU(W)A 2018 was subsequently amended by the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A 2020), which made provision for the ratification and implementation in domestic law of the Withdrawal Agreement between the UK and the EU.

The Withdrawal Agreement set out the arrangements for the UK’s withdrawal from the EU. It included a transition period (or, to use the UK government’s

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