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by Roland Kielman

Europe recently finalized its European Market Infrastructure Regulation (EMIR), concluding nearly 18 months of legislative drafting. Responsibility for implementing the regulation now falls to the new pan- European supervisor, the European Securities and Markets Authority (ESMA).

Among the changes EMIR will bring to European markets are enhanced regulation of the region’s over-thecounter (OTC) derivatives markets and a common set of rules and safety standards to govern central counterparties.

Eye on June

After the Council of the E.U. approved the final language on February 21, the European Parliament passed the legislative package on March 29. Now EMIR is being translated into all of the 23 official languages of the E.U., after which it will be published in the Official Journal of the Union. The regulation will come into force 20 days after the publication, most likely in early June.

In the meantime, ESMA has already begun to draft the regulatory technical standards – the so-called “level 2” rules – that will complement the legislative text of EMIR. These rules are scheduled to be finished by September 30, 2012.

Two major areas of focus in the months ahead will be addressing unresolved issues such as the extraterritorial impact of the new regulation and its harmonization with the regulatory regimes in the U.S. and Asia.

To learn more

ESMA recently published the first of a series of consultation papers on the EMIR technical standards and a second is expected by June. DTCC submitted comment letters on the consultation that focused on the technical standards for central counterparties and trade repositories. (To see the letters, click here.)