EMIR Pensions Exemption

EMIR: Pension funds have been granted a further two-year exemption from central clearing requirements, but what difference does it make in practice?

The European Market Infrastructure Regulation (EMIR) came into force on 16 August 2012. It imposes a number of requirements on counterparties to derivative contracts, central counterparties and trade repositories. The European Commission has recently decided to extend the exemption for pension funds from central clearing requirements for their over-the-counter derivative hedging transactions for a further two years, from 16 August 2015 to 16 August 2017. This article provides a summary of the implications of EMIR for pension schemes and comments on the practical value of the recent extension.