What do managers of Irish UCITS and AIFs need to know?
The European Market Infrastructure Regulation
("EMIR") requires certain EU
counterparties, including Irish undertakings for collective
investment in transferable securities
("UCITS") and alternative investment
funds ("AIFs"), to put in place risk
mitigation procedures prior to entering into OTC derivatives
trades. This obligation includes a requirement to have in
place procedures for the timely, accurate and appropriately
segregated exchange of collateral with respect to OTC derivatives
trades entered into on or after 16 August 2012 (the date EMIR came
into force).
Over the past few years, European authorities have been working
on Regulatory Technical Standards
("RTS") detailing the procedures that
must be put in place to comply with the EMIR collateral
obligation. Until these RTS enter into force, counterparties
are free to apply their own collateral procedures.
