General Duty To Report Derivatives Transactions

Significant changes to the derivatives market are being introduced by EU Regulation No. 648/2012 on OTC derivatives, central counterparties and trade repositories ("EMIR") which entered into force on 16 August 2012. In particular, EMIR introduces a generalized duty to report derivatives transactions to trade repositories, as well as the obligation to use central clearing for specific transactions in central clearing counterparties (CCPs). The purpose of these obligations is to help achieving EMIR's principal goals, i.e. ensuring a greater transparency of derivatives transactions, mitigating counterparty risk, and strengthening the clearing requirements and mitigating operational risk. The new obligations are of universal application and affect not only financial counterparties (inter alia, banks, insurance companies, investment firms which manage UCIT investment funds and alternatives), but also non-financial counterparties.