• A New Panorama for the Clearing and Recording of Over-the-Counter Derivatives in Europe: the Proposed European Market Infrastructure Regulation
  • September 30, 2010
  • Law Firm: Shearman Sterling LLP - New York Office
  • On 15 September 2010, exactly two years after the collapse of Lehman Brothers, the European Commission has published a proposal for a new Regulation on OTC derivatives, central counterparties and trade repositories, known as the European Market Infrastructure Regulation ("EMIR"). The EMIR proposal follows a communication that the Commission issued in July 2009 in which it identified existing problems in the OTC derivatives markets and suggested ways of reducing systemic risk in such markets. The communication was followed by a consultation exercise in which the Commission set out a draft text and its views on reforming the OTC derivatives markets. It is proposed that certain OTC contracts be required to be cleared by a central counterparty ("CCP") and that there be reporting of OTC derivatives trades to trade repositories. There is also a proposal for a pan-European regime for CCP authorisation and supervision.