EU Commission introduces significant updates to EMIR

28 July 2019

EMIR Refit cover

EMIR Refit is the result of the European Commission’s periodic review of the European Market Infrastructure Regulation (EMIR). The new Refit legislation seeks to amend and simplify EMIR to address compliance costs, transparency issues and insufficient access to clearing for certain counterparties. The Commission’s thorough report introduces significant changes. These include introducing the concept of Small Financial Counterparties which are exempt from clearing. The Refit also introduces specific requirements around the affordability and accessibility of clearing services.

The understanding of your categorisation and obligations under the EMIR Refit can be complex. We have outlined the key changes in an infographic here.

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In summary, EMIR Refit makes the following amendments to EMIR:

  • There are new categories for Financial Counterparties (FCs) and non-financial counterparties (NFCs) that are exempted from clearing obligations.
  • The FC and NFC categories are further broken down to FC+ or FC- and NFC+ or NFC- depending on whether they fall below the clearing threshold and therefore are not subject to mandatory clearing.
  • The Commission has introduced new requirements to notify regulators about preparing or suspending clearing activities.
  • Methodology for clearing threshold calculations is now prescribed and must be adopted.
  • FC definition has expanded to include all AIFs and AIFMs, subject to territorial scope.
  • Firms must have appropriate recordkeeping in place to validate clearing exemptions.
  • If no calculation is performed firms may be subject to clearing obligations in October.

To avoid challenge from the regulators, make sure you have clearly documented your Refit fund-level calculations. If you rely on existing fund management calculations, you should make sure that they are in line with EMIR Refit and recorded separately.

Bovill can help

Our specialist team can provide advice on any aspect of EMIR and we have a large client base of alternative investment fund managers. Get in touch to discuss how the EMIR Refit will affect your firm.


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