European Market Infrastructure Regulation (EMIR)

The European Market Infrastructure Regulation (EMIR) is a set of European Union regulations aimed at improving the transparency and stability of over-the-counter (OTC) derivatives markets. EMIR requires central clearing of standardized OTC derivatives, reporting of trades to trade repositories, and the implementation of risk mitigation techniques for non-centrally cleared derivatives. The regulation also includes stringent requirements for collateral management, capital adequacy, and operational risk controls.

Example

Under EMIR, a European bank trading OTC derivatives must report its transactions to a trade repository and clear eligible trades through a central counterparty.