ESMA has updated its Questions and Answers (Q&As”) on the implementation of the European Markets Infrastructure Regulation (EMIR). The updated Q&As provide clarifications on the new framework introduced by Regulation 2019/834 amending EMIR (so-called EMIR Refit) and amends an existing Q&A on novation.
The overall update mainly provides new answers on the implementation of the EMIR Refit framework with regards to:
- The clearing obligation for financial (FC) and non-financial counterparties (NFC);
- The procedure for notifying when a counterparty exceeds or ceases to exceed the clearing thresholds; and,
- How counterparties should report derivatives novations and removes some obsolete references to frontloading when populating field “Clearing Obligation”.
The update also includes an amendment to the existing Q&A 20 in the OTC Section, clarifying that for the purpose of applying the clearing obligation, all types of novations of derivative contracts are covered.
