On 15 July 2019, ESMA published an updated version of the Questions & Answers (hereinafter the “Q&A”) on the implementation of the Regulation (EU) 648/2012 of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (hereinafter referred to as “EMIR”) following the introduction of the Regulation (EU) 2019/834 of 20 May 2019 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories (hereinafter referred to as the “EMIR Refit”). The EMIR Refit effectively amended EMIR as of 17 June 2019 to a certain extent.
The following provides for a non-exhaustive summary of the key changes reflected in the updated Q&A:
i. General questions – Question 1 (a) was amended in order (i) to clarify that institutions for occupational retirement provision (hereinafter the “IORPs”) can also be considered as counterparties to a derivative transaction in the context of EMIR, (ii) to clarify that the phrase ‘fund managers’ covers a UCITS management company, an AIFM and an authorised entity that is responsible for managing and acting on behalf of an IORP and (iii) to clarify that for the purposes of reporting to the trade repositories (hereinafter the “TRs”), the fund manager must report to TRs on behalf of funds
ii. OTC questions – Question 17 on the frontloading requirement was deleted as frontloading is no longer a requirement under the EMIR Refit
iii. OTC questions – Question 20 (b) was amended to reflect the new conditions under which a swap which results from the exercise of a swaption is subject to the clearing obligation when both the swap and the corresponding swaption are entered into on or after the date on which the clearing obligation takes effect
iv. TR – Question 4 on the backloading requirement was deleted as backloading is no longer a requirement under EMIR Refit
v. TR – Question 13 was amended in order to clarify that intragroup trades are not subject to the relevant reporting obligations where at least one of the counterparties is a non-financial counterparty or would be qualified as a nonfinancial counterparty if it were established in the European Union
vi. TR – Question 39 was amended to clarify that the fund manager must report to the relevant trade repository on behalf of the individual fund, where the block trade was concluded by a fund manager and then allocated to individual funds
vii. TR – a new Question 52 has been inserted into the Trade Repository section concerning the notional amount field for credit index derivatives
Changes (i) and (vi) will take effect as of18 June 2020.