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EMIR - European Market Infrastructure Regulation

Banco de Portugal is responsible for supervising compliance with the requirements laid down in 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, as regards  financial counterparties under its supervision (credit institutions and financial companies).

The European Market Infrastructure Regulation (EMIR) lays down legal requirements aimed at improving the transparency and mitigating the risks associated with derivatives markets, specifically by requiring the use of a central counterparty or the adoption of risk-mitigation techniques for derivatives not centrally cleared.

With a view to increasing regulation and transparency of over-the-counter (OTC) derivative contracts, this Regulation sets forth  reporting obligations for the parties to these contracts, as well as risk-mitigation obligations.

EMIR also establishes requirements regarding the authorisation and supervision of central counterparties (CCPs) and entities that collect, process and maintain data on transactions, the so-called trade repositories.

EMIR sets out obligations with respect to:

  1. central clearing and bilateral risk management for OTC derivative contracts;
  2. reporting requirements for derivative contracts;
  3. performance of CCPs’ activities; and
  4. trade repositories.

EMIR is directly and compulsorily applicable in all Member States.

Implementation of this Regulation is framed by regulatory and implementing technical standards approved by the European Securities and Markets Authority (ESMA) and the European Commission.

Decree-Law No 40/2014 transposes and implements EMIR into Portuguese law. This Decree-Law establishes the penalty regime  and designates the competent supervisory authorities to monitor compliance with the obligations set out in EMIR.