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White & Case Derivatives Insight – The Delta Report

The Delta Report – Derivatives Newsletter: July 2017

Read: Brexit update

  • With the UK's snap general election resulting in a hung parliament, the task of legislating for Brexit through the 'Repeal Bill' and other related primary and secondary legislation has undoubtedly become more onerous.
  • Much remains unclear in respect of the likelihood, shape or duration of any transitional arrangements and the resulting impact on UK based financial institutions and their ability to 'passport' services and product sales across the EU. As a result, we note many client institutions are already significantly advanced with their plans for a post-Brexit trading environment.
  • A development related to Brexit is the newly advanced legislative proposals in the form of the 'EMIR Review' from the EU Commission. These proposals suggest that it may become mandatory for large, systemically important clearing houses who clear large volumes of euro denominated derivatives to relocate within the physical territory of an EU member state.


Read: A comparison of the reporting obligation under EMIR and under MIFIR

This article is a comparison of the reporting obligation under EMIR1 and under MIFIR2. In summary we note that:

  • The scope of entities caught by the relevant reporting obligation is wider under EMIR, which captures both dealers and end-users, than under MIFIR, which captures only investment firms authorised under MIFID II.
  • The range of instruments caught is broader under MIFIR than under EMIR, since the reporting obligation under MIFIR hinges on the newly expanded definition of "financial instrument" under MIFID II which includes instruments other than derivatives.
  • The nature of transactions to be reported is broadly similar between EMIR andMIFIR however MIFIR contains clear exemptions for certain transactions;
  • The timing for delivery of reports is the same (i.e. on a T+1 basis);
  • The content of reports is broadly similar in length; and
  • Whereas reports under EMIR are delivered to reported to a registered or recognised trade repository, under MIFIR reports are delivered to the relevant competent authority.


Read: Reflections upon the proposed amendments to EMIR

  • This article on the EMIR Review analyses in detail the main changes in the legislative proposals published on 4 May 2017 and how they may affect entities that enter into OTC derivatives. In particular, our note pauses on the consequences of reclassifying securitisation special purpose vehicles as financial counterparties and how the EMIR margin obligations may therefore be satisfied. In addition, changes in respect of clearing and reporting are also explained.


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1 Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories
2 Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/201


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