The European Market Infrastructure Regulation (EMIR) and Markets in Financial Instruments Directive (MiFID) are European Union (EU) regulations. Once the United Kingdom (UK) leaves the EU, they are likely to implement elements of these directives into their own law, as these regulations are in line with guidelines set out by G20, of which the UK is a signatory. Many UK financial institutions have already had to implement the EMIR and MiFID standards in order to comply, and th

As mandatory clearing of certain standardized OTC derivatives products starts to gain traction globally, as a potential Clearing Member (CM), it is pertinent to identify what factors one should consider in choosing a central counterparty clearing house (CCP). Many CCPs have sprung up in the market, each offering slightly different services, and not all CCP rules are consistent. For example, not all CCPs have the same default waterfall mechanics, or standardized events of defa

Currently London is the hub of clearing euro-denominated derivatives. For clearing houses to be authorized under EMIR, they have to be approved by ESMA. Since Brexit negotiations began, it is clear that the EU wish to move euro-denominated derivatives clearing into the EU. Doing so could force clearing houses located in London to move into Europe. The European Commission has drafted a new law that will require systemically important firms in the EU to be overseen by the EU au

​With central clearing of standardised OTC derivative contracts gaining traction under the EMIR and Dodd Frank regulations, market participants are becoming more focussed on diversifying the types of assets that they can post to the clearing house as collateral. This Reuters article gives an interesting insight into how LME clearing house is permitting commodities to be posted as Initial Margin for commodities trades that are cleared. Ultimately, once all the margin rules are

Central clearing is fast becoming a reality. Counterparties in the US have been clearing standardised interest rate swaps and credit derivative transactions since 2013. In Europe, the first phase of clearing began on 21 June 2016. Under the Financial Markets Act, the first phase of mandatory clearing could apply as soon as the second half of 2017. Many Central Clearing Houses or Central Counterparties (‘CCPs’) have sprung up all over the globe, each one offering something sli