On 20 August 2019, the Cyprus Securities and Exchange Commission issued Circular No. 336 informing regulated entities of recent amendments made to Regulation (EU) 648/2012, EMIR.
Regulation (EU) 2019/834 amends EMIR as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories, and the requirements for trade repositories. This new regulation, which is known as both ‘EMIR Refit’ and ‘EMIR 2.1’, came into effect on 17 June 2019.
ESMA Questions and Answers on EMIR have also been amended in order to provide further guidance in relation to EMIR Refit.
As of 18 June 2020, the Financial Counterparty (FC) will be solely responsible and legally liable for reporting on behalf of both itself and non-financial counterparties (NFCs) that are not subject to the clearing obligation with regard to OTC derivative contracts entered into by those counterparties. In relation to UCITSs and AIFs, the management company of a UCITS and the AIFM, respectively, will be responsible and legally liable for reporting on behalf of the UCITS or AIF with regard to OTC derivative contracts, to which the UCITS or AIF is counterparty and ensuring the correctness of the details reported.
Regulated entities should review the implications of the amended provisions and take the necessary action in order to ensure compliance with EMIR. Re-evaluate the status of counterparties and clients under EMIR Refit as to whether they are in compliance with the new rules and obligations. Consider changing agreements with corporate clients to incorporate EMIR Refit changes.
CySec’s Circular 336 can be found here.