EMIR: frontloading requirement and updated ESMA Q&As
The European Securities and Markets Authority (ESMA) sent a letter to the European Commission on 8 May 2014 notifying the commission of issues that it has identified regarding the frontloading requirement under Regulation (EU) No 648/2012 on over-the-counter (OTC) derivatives, central counterparties and trade repositories (EMIR).
Under frontloading, users of OTC derivatives transactions may be required to clear transactions that are entered into after a central counterparty has been authorised to clear transactions of that class.
ESMA has identified that the frontloading requirement ‘may introduce significant uncertainties in the market with the consequences mainly borne by derivatives end users. These consequences are legal, operational and financial… and the overall effect could well be a reduction in the incentive to hedge risks during a certain period (to avoid the consequences of the frontloading effect), which would in turn increase the unhedged risks and would impact negatively on financial stability’…
Click on the link below to read the rest of the Eversheds briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Eversheds
News from The Lawyer
Briefings from Eversheds
Eversheds’ retail finance briefing is designed to keep you up to date with the latest legal, regulatory and industry developments affecting the retail finance industry.
Welcome additional form of protection for financial institutions and their employees.
Analysis from The Lawyer
Eversheds is no stranger to an international tie-up but now it’s in the market for the jewel in its global crown
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all