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EMIR Q&As Updated

On 10 July 2014 both the ESMA EMIR Q&A and the EU Commission EMIR FAQ documents were updated.

ESMA Q&A

Two changes have been made to the ESMA Q&A document since it was last updated on 23 June 2014.

A new OTC Question 13(a) (Status of entities not established in the Union) has been added.  This confirms that pension schemes established in a third country do not benefit from the exemption from the clearing obligation provided under EMIR.

In addition, CCP Question 8(i) (Segregation and portability) has been modified.  This expands on the previous confirmation that all clearing members of EU CCPs (i.e. including non-EU clearing members of EU CCPs) which provide services to clients are subject to the segregation requirements in Article 39 of EMIR.  Therefore, they are required to offer their clients (including non-EU clients), at least, the choice between omnibus client segregation and individual client segregation and inform them of the costs and level of protection associated with each option.  To the extent that the insolvency regime of the third country might interfere with the provision of omnibus and segregated accounts as envisaged by EMIR, the non-EU clearing member should look to provide alternatives which maintain the same level of protection as EMIR, and make full disclosure of the risks to the client if this is not possible.

EU Commission FAQ

Since the EU Commission document was last updated on 18 December 2013, a new section IV (regarding EU CCPs) has been added.  This section largely repeats the advice given by ESMA in CCP Question 8(i) (see above).  It confirms that Article 39 of EMIR – which requires clearing members to offer their clients, at least, the choice between omnibus segregation and individual segregation and inform them of the costs associated with each option – applies to all clearing members of EU CCPs, and not just EU clearing members.

 

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