ESMA updates EMIR Q&A and clarifies point on EMIR Refit calculation dates
News    ·   06-11-2019

AUTHOR: Andrew Caruana Scicluna; Giuseppe Gigante

On 2 October 2019, the European Securities and Markets Authority (“ESMA”) issued an update of its Q&A on practical questions regarding data reporting issues, stemming from the European Markets Infrastructure Regulation (“EMIR”).

EMIR was amended recently, with the changes (known as “EMIR Refit”) entering into force on 17 June 2019. EMIR Refit imposes a number of changes, including, inter alia, a widened definition of financial counterparty and an exemption form the clearing obligation for financial counterparties with low volume of derivative trades that do not exceed the clearing thresholds outlined in the regulation (commonly referred to as small financial counterparties), who would otherwise have to clear their derivatives under EMIR.

In order for the small financial counterparties to benefit from the exemption, EMIR refit imposes an obligation to calculate annually their exposure in OTC derivatives. On the date of entering into force of EMIR Refit (17 June 2019), there was a requirement for all financial counterparties that had previously taken positions in OTC derivatives to perform the clearing thresholds calculation in order to determine whether  or not they were exempt from the clearing obligation.

For newly in-scope financial counterparties who had not taken position in OTC derivatives before 17 June 2019 (for example, financial counterparties that have come into existence since that date), however, it has been unclear when such entities should perform the clearing threshold calculation. In the updated Q&A, ESMA clarifies that financial counterparties which start taking positions in OTC derivatives only after the entry into force of EMIR Refit would have to calculate the clearing thresholds and determine the results 12 months after they start taking positions in OTC derivative contracts.

Accordingly, financial counterparties who have started taking positions in OTC derivatives since 17 June 2019 would need to determine the date that the first of these positions was taken and make the calculation one year after that date.

Should you require any assistance in regards to EMIR Refit or derivatives queries generally, please contact Andrew Caruana Scicluna ( or Giuseppe Gigante (

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