Regulation (EU) 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories (EMIR), entered into force on 16 August 2012.

This Regulation was amended by Regulation (EU) 2019/834 of the European Parliament and of the Council, of 20 May 2019, (EMIR-Refit) which reviewed EMIR, as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivatives contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories.

EMIR and its amendment by the EMIR-Refit Regulation establish a series of obligations for all investors who trade derivatives contracts, whether they are financial or non-financial institutions, although the intensity of these obligations is proportionate to the trading level and the use being made of derivatives.

Likewise, EMIR contains a series of exceptions for certain transactions, such as the hedging of own risks when managing a business, contracts concluded between companies belonging to the same group, etc. All stakeholders should review whether they are subject to any of the situations of exemption, and in such case, they should carry out the relevant formalities.

Main obligations under EMIR (amended by EMIR-Refit)

The main obligations under EMIR are:

  • The mandatory use of a central counterparty when trading certain derivatives contracts which have been declared subject to centralised clearing obligations:
      • Financial institutions exceeding any of the trading thresholds referred to in EMIR for any class of underlying asset, shall clear contracts executed with institutions, which are also declared subject to the clearing obligation for any class of derivative, through a CCP.
      • Non-financial institutions exceeding any of the trading thresholds referred to in EMIR for any class of underlying asset, shall clear contracts executed with institutions, which are also declared subject to the clearing obligation in respect of the class of contracts in which the clearing threshold has been exceeded, through a CCP.
      • However, EMIR envisages the possibility of not clearing contracts declared subject to the clearing obligation through a CCP if such contracts have been executed between entities belonging to the same group, and the conditions laid down in Article 4(2) of the European Regulation are fulfilled.
    • Financial and non-financial institutions shall inform the CNMV and ESMA (the European Securities and Markets Authority) that they have exceeded certain clearing thresholds or that they have decided not to calculate their positions in derivatives, in which case they shall also be subject to the centralised clearing obligations.
    • All derivatives contracts executed shall be reported to authorised trade repositories or to those recognised by ESMA. However, the reporting obligation shall not be applicable to derivatives contracts executed between entities belonging to the same group when at least one of the counterparties is a non-financial institution, provided that:
      • Both counterparties are fully included in the same scope of consolidation.
      • Both counterparties are subject to appropriate centralised risk evaluation, measurement and control procedures.
      • The parent undertaking is not a financial counterparty.
      • Entities wishing to use this exception notify the CNMV accordingly.
    • The use of risk-mitigation techniques when executing derivatives contracts not cleared through a central counterparty, related to:
      • The timely confirmation of contracts and the establishment of procedures defined in advance to identify and settle potential disputes between the parties.
      • Portfolio reconciliation and compression, periodic valuation of contracts and the exchange of collateral, when certain trading thresholds are exceeded.
      • Article 11(5) et seq EMIR lay down a series of exemptions to the obligation of exchanging collateral for contracts executed by entities belonging to the same group, providing that a number of requirements are met.
    • The establishment of organisational, conduct and prudential requirements for CCPs.
    • The establishment by ESMA of functioning and authorisation requirements for trade repositories. Currently, ESMA has an updated list of authorised trade repositories which may be consulted at the following link.


    • All OTC derivatives contracts, that is to say, those not executed through a regulated market in accordance with MiFID regulations, shall be subject to centralised clearing requirements, when so determined by European Authorities. In the remaining cases, risk-mitigation techniques shall be applicable.
    • All derivatives contracts, both those executed on regulated markets and OTC, shall be reported to trade repositories duly authorised or recognised by ESMA.
    • Financial counterparty means: investment firms, credit institutions, insurance undertakings, reinsurance undertakings, investment funds and their management companies, pension funds (subject to certain transitional exemptions), alternative investment funds and central securities depositories.
    • Non-financial counterparty means: other entities not considered as financial counterparties. It is considered that non-financial counterparties have exceeded the clearing threshold when the gross notional value of their OTC derivatives contracts exceed the following amounts:
      • €1 billion for credit derivatives;
      • €1 billion for equity derivatives;
      • €3 billion for interest rate derivatives;
      • €3 billion for currency derivatives;
      • €4 billion for commodity derivatives and other underlying assets not mentioned above.

    For this calculation, the non-financial counterparty shall include all OTC derivatives contracts executed by it or by entities belonging to its group which are not used to mitigate business risk or treasury finance activities.

    DISCLAMER: The aim of this text is to provide information to the public in general on different aspects related to EMIR. Given its informative nature it cannot constitute a ground for subsequent legal interpretations, the prevailing regulations being the only ones applicable for these purposes.