The Cabinet Office has published an explanatory memorandum submitted by HM Treasury on the European Commission’s (the Commission) November 2016 report under Article 85(1) of the European Markets Infrastructure Regulation (EMIR). Among other things, the memorandum states that the Government:
- fully supports implementation of G20 commitments that aim to increase the safety of the over-the-counter (OTC) derivatives market and welcomes the Commission’s review into the deficiencies of EMIR;
- will seek to ensure that the EU’s future proposal on changes to EMIR remain consistent with international standards, as it is important that any changes to EMIR remain consistent with the implementation of the G20 agreement across G20 partners and between Member States to prevent regulatory arbitrage and competitive distortions;
- believes it is important that the EU’s future proposals should be implemented in a way that does not discriminate against UK market participants and infrastructures and ensures that the regulatory burden imposed is proportionate to the benefit in terms of systemic risk reduction; and
- supports the proposal to review whether the right balance has been found on reducing systemic risk without imposing unnecessary burdens on corporate (non-financial) users of OTC derivatives, small financial firms and pension scheme arrangements. The Government similarly supports the Commission’s proposal to review whether a more proportionate treatment under the clearing obligation as well as on reporting can be given to these institutions without undermining the core objectives of EMIR.
View HM Treasury memorandum on European Commission report under Article 85(1) of EMIR, 20 December 2016