The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) on the implementation of the European Markets Infrastructure Regulation (EMIR). The updated Q&As provide clarifications on the new framework introduced by Regulation 2019/834 amending EMIR (so-called EMIR Refit) and amends an existing Q&A on novation.
The overall update mainly provides new answers on the implementation of the EMIR Refit framework with regards to:
- The clearing obligation for financial (FC) and non-financial counterparties (NFC);
- The procedure for notifying when a counterparty exceeds or ceases to exceed the clearing thresholds; and,
- How counterparties should report derivatives novations and removes some obsolete references to frontloading when populating field “Clearing Obligation”.
Finally, this update also includes an amendment to the existing Q&A 20 in the OTC Section, clarifying that for the purpose of applying the clearing obligation, all types of novations of derivative contracts are covered.
The purpose of these Q&As is to promote common supervisory approaches and practices in the application of EMIR. They provide responses to questions posed by the general public and market participants in relation to the practical application of level 1 and level 2 provisions relating to transparency and market structures issues.
ESMA will continue to develop this Q&A on EMIR in the coming months and will review and update them where required.