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EU EMIR 3.0 now in force: key changes for Irish funds – active account and representativeness, new clearing-threshold calculation, IM model validation, reporting penalties, and UCITS/MMFR amendments

Published on: 20 January 2025

Published by a LexisNexis Ireland - Banking & Financial Services expert
Legal News
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Article summary

On 24 December 2024, the package of proposals amending EMIR to make EU derivatives clearing more attractive (EMIR 3.0) took effect. The EMIR 3.0 Regulation is available here. The EMIR 3.0 Directive is available here. These proposals seek to make derivatives clearing in the EU more attractive.

EMIR 3.0 Regulation

EMIR 3.0 refreshes clearing, risk mitigation and reporting requirements, adjusts certain exemptions from clearing and margining, and makes further miscellaneous updates (including a requirement to validate initial margin models). Validation of initial margin models is expressly required. We outline the principal changes under EMIR 3.0 relevant to financial counterparties, such as Irish funds. Two headline duties in the EMIR 3.0 Regulation — the active account obligations and the new framework for initial margin model validation (IMMV) — are anticipated to affect only a limited subset of Irish funds. Although most EMIR 3.0 measures apply from 24 December 2024, some provisions in the Regulation follow different commencement schedules.

Changes to the Clearing Calculation

EMIR 3.0 adds a second methodology for assessing whether a fund has breached the clearing thresholds, which in turn determines whether an OTC trade must be centrally cleared through a CCP...

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