EMIR – Update And Next Steps

INTRODUCTION

In response to concerns about systemic risks in over-the-counter ("OTC") derivatives markets, the Group of Twenty (G20) initiated a reform programme in 2009 to reduce the systemic risk from OTC derivatives. As initially agreed in 2009, the G20's reform programme comprised four elements:-

• All standardised OTC derivatives should be traded on exchanges or electronic platforms, where appropriate;
• All standardised OTC derivatives should be cleared through central counterparties ("CCPs");
• OTC derivative contracts should be reported to trade repositories ("TRs"); and
• Non-centrally cleared derivative contracts should be subject to higher capital requirements.

In 2011, the G20 agreed to add margin requirements on non-centrally cleared derivatives to the reform programme and called upon the BCBS (i.e. the Basel Committee on Banking Supervision) and IOSCO (i.e. the International Organisation of Securities Commissions) to develop for consultation,