Under EMIR, financial and non-financial counter-parties must report on a daily basis all derivatives, including intra-group transactions, to one of the six registered trade repositories. Aside from the reporting obligation, EMIR requires central clearing for certain classes of over-the-counter derivatives (OTC) derivatives for financial institutions and complex corporates, and the application of risk mitigation techniques for non-cleared transactions.

Not ready or will not be ready for 3-4 months

Fifty-eight percent of respondents in Reval’s poll say that they are either not ready (for the 12 February deadline) to comply with EMIR or do not expect to be ready for three to four months. 

Expect relief from EMIR deadline

Previously there has been relief from regulatory deadlines:

• in the U.S., the Commodity Futures Trading Commission (CFTC) issued a series of No-Action relief letters for various derivative-related rules coming into effect under the Dodd-Frank Act.
• in the Single European Payments Area (SEPA) regulation, the European Commission adopted a proposal earlier this month that gives an extra transition period of six months during which payments that differ from the SEPA format can still be accepted. 

Sixty-five percent of respondents in the recent Reval poll expect the European Commission to provide corporates a relief mechanism for compliance.

“Companies seem to be expecting that they will receive some kind of relief from complying with the EMIR deadline next week,” says Guenther Peer, Regional Vice President, Solutions Consulting EMEA at Reval. “With SEPA’s extended transition period and the issuance of No-Action relief letters from the CFTC in the U.S. It seems that companies have become accustomed to shifting dates for regulatory compliance. This could be the reason why many companies report that they are not ready to comply with EMIR.” 

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CTMfile take: It is very, very late, even for the regulators in Europe, to announce an extension, maybe all transactions can be backloaded for several more months?