Many multi-national corporations have operations and trading in both EMEA and USA. The problem is that the complex EMIR and Dodd-Frank regulations overlap. So many companies have to deal with them in parallel in the same legal entities, e.g. Europe based corporate treasury department also maintains relationships with banks in the US as well as with banks in Europe.

Get rid of the overlap and streamline bank relationships

Streamline your bank relationships and operations, so that your European operations and treasury only deal with European banks, and stop dealing with American parent banks, instead dealing with their subsidiaries in Europe. And do the reverse for your treasury and operations in the US. Thus, the US treasury and operations will only have to comply with Dodd-Frank, and the European treasury and operations will only have to comply with EMIR. 

Effort is worth it

This reorganisation and streamling takes considerable effort and resources because it involves many different pieces, including:

• the ISDA framework and corresponding EMIR annexes will have to be renegotiated
• the need to check the creditworthiness of each of the new bank subsidiaries involved.

However, double compliance is an even bigger administration overhead because the requirements from EMIR and from Dodd-Frank are not exactly the same. They significantly diverge in many areas, for example, exemptions (clearing thresholds) and reporting criteria. 

Several MNCs have taken this approach and found that it was worth it.

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CTMfile take: This separating of market segments and treasury operations in the US and Europe was almost inevitable given the differences between EMIR and Dodd-Frank. Nevertheless, it is crazy that this should have been necessary.