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EMIR

 

European Market Infrastructure Regulation (EMIR) entered into force on 16 August 2012 (UE N 648/2012) and aimed to increase the stability of European OTC derivatives market by introducing:

  • – Clearing obligation for eligible OTC derivatives in order to reduce counterparty risk
  • – Measures to reduce operational risk for other derivatives
  • – Reporting obligation for OTC derivatives through a central trade repository in order to improve transparency

GMS has extensive expertise in implementing solutions to respond to these new regulations on OTC derivatives.

News

EMIR Clearing Obligation

From 2014, obligation to clear some OTC derivatives

GMS Solution:   Implementation of clearing features into Summit via APIs.

  • Static Data enrichment – Customer Classification
  • Trade capture – Clearing information (clearing member, original counterparty), Clearing flags, SSI defaulting logic
  • STD extension – New actions for clearing
  • Monitoring – BVS extension, changes on Finders and blotters
  • STP API – inhibit payment generation for cleared trades
  • Reporting – specific reports based on clearing broker statements

 

EMIR Risk Mitigation

For non-centrally cleared trades, obligation to follow specific rules to monitor operational and counterparty risk.

Amongst others:

  • Portfolio reconciliation
  • Timely confirmation

GMS Solution:

  • Portfolio reconciliation: ISDA MMS csv file generator to facilitate exchange of information and integration with reconciliation tool.
  • Timely confirmation: Summit STP implementation, restructuring of existing STP processes to speed up the sending of confirmation, Implementation of Financial/non-financial features.

 

EMIR Reporting Obligation

Obligation to report to central repository, contracts details of OTC derivatives (cleared or non-centrally cleared)

GMS’s Functional architecture proposal:

EMIR