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Regulation 2014: EMIR

February 6, 2014

If you’re paying attention to European Market Infrastructure Regulation (EMIR), you know that 12 February 2014 is a date worth watching as transaction reporting comes into full force. With G20 objectives laid down in 2009 for overall financial stability, EMIR will require the central clearing, reporting and risk mitigation of all derivative contracts executed by European counterparties across all asset classes.

As one of the many regulatory dossiers drafted by the institutions of the EU, EMIR will affect all firms that trade derivatives in Europe and requires substantial implementation and effort. For many large dealers, EMIR has necessitated changes to operational models, and prompted firms to revisit their client service models. Failure to comply could potentially result in fines from regulators and the loss of client business.

Buy-side firms will also be deeply impacted by the arrival of EMIR, as the onus to report derivatives trades will be shared by both the sell-side and the buy-side. This will have a significant impact on their business processes, operations and returns for their investors. Due to the costs associated with EMIR reporting, at the extreme end of the scale the regulation could add as much as two to three basis points to asset managers’ cost-income ratios over the next few years, according to Dr Anthony Kirby, executive director and head of regulatory reform for capital markets and asset management in the risk and regulation division of EY’s financial services practice.

At Bloomberg, our focus is answering our clients’ questions and solving their problems. Bloomberg’s EMIR trade reporting solution allows users to seamlessly send their EMIR trades to a repository of their choice, regardless of which of our various electronic or voice trading platforms it is traded over. Clients can even report trades that were executed away from their Bloomberg terminal. The solution provides capabilities across asset classes and is available as standard to every terminal user.

Francine Lacqua, Editor-at-Large and Anchor, Bloomberg TV sits down with regulation experts:
Rob Friend, Global Business Manager for Fixed Income, Currencies, Commodities and Foundational Applications, Bloomberg L.P.
Constantin Cotzias, Head of Government and Regulatory Affairs, Bloomberg L.P., EMEA and Asia
Paul Tivnann, Global Head of FX and Commodities Electronic Trading, Bloomberg L.P

With the buy-side now responsible for reporting all derivatives transactions, it’s essential they have access to tools they need to remain compliant. As EMIR requirements have crystalised, our clients have been asking us about the ramifications for their businesses. By developing a solution to enable them to report their trades in line with the regulation, our aim is to make the process of trade reporting as seamless as possible.

If you’re a Bloomberg Professional service subscriber, you can find more information about EMIR and our reporting solution at EMIR <GO>

Bloomberg Brief has published a special news and data supplement outlining the new reporting requirements for over-the-counter derivatives trades that are slated to go into effect on Feb. 12. The special issue, which includes insight and commentary on the European Market Infrastructure Regulation (EMIR) from the European Securities and Markets Authority’s Fabrizio Planta, Emmanuelle Choukroun at Societe Generale Securities Services and Gunnar Stangl from Commerzbank, can be accessed here.

Rob Friend, Global Head of Fixed Income Product, Bloomberg L.P.