Regulatory Alerts2013-11-18
Draft technical standards under EMIR on contracts with a direct, substantial and foreseeable effect within the Union and non-evasion
The European Securities and Markets Authority (ESMA) issued final draft regulatory technical standards to define when over-the-counter derivative contracts between third-country entities have a direct, substantial, and foreseeable effect within the European Union. The standards establish that such contracts are subject to EMIR clearing and risk mitigation obligations if they are guaranteed by a Union-based financial counterparty meeting specific quantitative thresholds or are concluded between Union branches of third-country entities. Additionally, the report outlines measures to prevent the evasion of EMIR rules and includes a six-month delay from the regulation's entry into force to allow market participants time to adapt to the new requirements.