European Commission Proposes Changes To EMIR Derivatives Rules

The European Commission has proposed reforms to the European Market Infrastructure Regulation (EMIR) to create "simpler and more proportionate rules" for over-the-counter (OTC) derivatives.

EMIR was introduced in the wake of the financial crisis to make financial markets safer and more stable. It aims to reduce risks to the financial system arising from derivatives transactions by increasing the transparency of the OTC derivatives market, where derivative contracts are not traded on an exchange but privately negotiated between two counterparties.

The changes aim to reduce costs and regulatory burdens without compromising financial stability, the Commission said.

The amendments cover streamlined reporting obligations, improvements to the quality of data reported to trade repositories, clearing obligations for non-financial and small financial counterparties and pension funds, central counterparty (CCP) transparency, risk mitigation for non-cleared OTC