The European Commission has proposed a set of measures to ease the reporting burden and simplify regulatory requirements for companies that participate in the EU's derivatives market.

These changes could save corporates such as energy companies or manufacturers up to €2.6 billion in operational costs and up to €6.9 billion in one-off costs, said the Commission.

The proposed reforms will introduce simpler and more proportionate rules for over-the-counter (OTC) derivatives to reduce costs and regulatory burdens for market participants without compromising financial stability. OTC derivatives are regulated in the EU by the European Market Infrastructure Regulation (EMIR), which was adopted in 2012 following the financial crisis.

Jyrki Katainen, the Commission's vice-president for Jobs, Growth, Investment and Competitiveness said: "Our aim is to simplify rules as well as to eliminate disproportionate costs and burdens to small companies in the financial sector, corporates and pension funds.”

Key changes to derivatives under EMIR

The proposals would make the following changes:

• introduce more proportionate rules for corporates;
• intragroup transactions will no longer have to be reported if one of the counterparties is a non-financial company;
• transactions between a financial counterparty and a small non-financial counterparty will be reported by the financial counterparty on behalf of both counterparties;
• reporting on historic transactions will no longer be required;
• for non-financial counterparties, only non-hedging contracts will be counted towards the thresholds triggering the clearing obligation;
• non-financial counterparties will only have to clear the asset classes for which they have breached the clearing threshold;
• the scope of the clearing obligation for financial counterparties will include some additional relevant market players while exempting the smallest financial counterparties;
• more time to develop clearing solutions for pension funds;
• streamline the application of reporting requirements and making them more proportionate for all counterparties;
• ease the administrative burden while introducing improvements to ensure the quality of reported data.