EMIR – European Market Infrastructure Regulation

EMIR requirements under Regulation (EU) No. 648/2012 

Regulation (EU) No. 648/2012 on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation – EMIR), issued in response to the financial markets crisis, also places wide-ranging duties on non-financial counterparties (NFCs) such as industrial and trading companies regarding the acquisition of over-the-counter derivative contracts (interest swaps, foreign exchange forwards, etc.).

Concerning OTC derivatives, the EMIR duties laid down in a variety of what are known as regulatory and implementing technical standards include carrying out these transactions through central counterparties (mandatory clearing) and obligations to report to BaFin and ESMA, to implement risk-mitigation techniques (trade confirmations, portfolio reconciliation, etc.) and to report all derivative contracts to a trade repository.

EMIR audits under section 20 of the Securities Trading Act 

Section 20 of the Securities Trading Act [Wertpapierhandelsgesetz – WpHG] stipulates that on certain conditions compliance with the duties under EMIR are to be audited. An EMIR audit is mandatory for all non-financial counterparties that have concluded more than 100 OTC derivatives or OTC derivative contracts with a total nominal volume exceeding EUR 100 million in the past financial year not in the capacity of a small corporation or limited liability partnership.

The audit must be conducted within nine months of the end of the financial year by an appropriate certified public accountant or sworn auditor, who must be engaged at least 15 months from the start of the financial year.  

Our services

• Analysis of the derivatives traded regarding the thresholds for mandatory auditing and clearing and clarification of any issues (commodity futures, intercompany transactions, etc.)
• Recording existing processes in derivatives business (trade, execution, treasury, accounting) and developing recommendations for improvement
• Auditing measures taken regarding the fulfilment of regulatory requirements (mandatory clearing, reporting to trade repositories, BaFin and ESMA, risk-mitigation techniques)
• Auditing and certification of EMIR compliance under section 20 WpHG