New rules for derivatives

The European Market Infrastructure Regulation (EMIR) places obligations on banks and companies trading in derivatives.

EMIR: Minimise risk and increase transparency

The EU Regulation on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation, or “EMIR” for short) came into force on 16 August 2012, obliging banks and their clients to henceforth take extra measures when trading in OTC derivatives. It and has since been amended several times, most recently by Regulation of 20-May-2019 (EMIR-Refit). The term “OTC derivatives” encompasses any financial instruments used, for example, to hedge business risks. The aim is to reduce systemic risks in derivatives trading and to generally make this area of trading more transparent and robust.

To this end, all OTC derivatives contracts concluded, modified or terminated by financial counterparties (FC) and non-financial counterparties (NFC) must be reported to a trade repository. There are also additional mandatory risk mitigation techniques with which Commerzbank can provide assistance. Portfolio compression, hedging and clearing requirements may also exist, depending on the size and classification of the parties.

Refit minimises the burden on non-financial counterparties

For NFC- customers, Commerzbank will be reporting in accordance with the EMIR Refit requirements since June 18th, 2020. For other customers, the bank offers a reporting service.

Advantages as a Commerzbank customer

  • A capable contact is on hand to deal with any questions relating to EMIR.
  • Commerzbank works closely with the regulatory authority, so it is well informed.
  • Portfolio reconciliation under EMIR gives you a regular rundown of your transactions with Commerzbank at current market prices.

If you require more information, please do not hesitate to contact Commerzbank’s specialists.

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