The European Commission has published a report, which concluded that certain modifications should be made to the core counterparty requirements under EMIR.
The proposed modifications include:
- simplifying and streamlining the trade reporting requirements (possibly permitting replacing the dual-sided reporting requirement with a single entity reporting requirement);
- including a mechanism for suspending the clearing obligation in response to market turbulence or resolution situations;
- potentially requiring initial margin models to be endorsed by regulators (as is the case in the US) to help participants in non-cleared OTC derivatives contracts have confidence that their calculations are considered to be compliant; and
- reviewing whether particular obligations should apply to lower-risk market participants such as above threshold non-financial counterparties (NFC+s) and small financial counterparties.