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Eurex Clearing
The official journal states that under the European Market Infrastructure Regulation (EMIR), central clearing of interest rate swaps will become obligatory for big banks that are clearing members – (category one) on 21 June. Category 2 clearers will follow on 21 December 2016, while those in category 3 will be caught by the rules from 21 June 2017, with the bulk of derivatives users falling into these two groups.
In other words, clearing firms will have to comply from 21 June while asset managers will be subject to the new requirements from December 2016. From that date, mandatory clearing will apply to asset managers with outstanding gross notional amount of non-centrally cleared derivatives above EUR 8 billion. The rules will apply to plain vanilla interest rate derivatives, float-to-float swaps - known as basis swaps, forward rate agreements and overnight index swaps. Interest rate swaps make up around 80% of all global derivatives.
Finally, category four firms, which are non-financial counterparties whose over-the-counter derivatives portfolios exceed an asset-specific threshold, will have to send their trades for clearing from 21 December 2018.
Category | Composition of category | ESMA phase-in | Application of clearing mandate |
CAT 1 | Start of front loading | 6 months | 21 February 2016 June 21st, 2016 |
CAT 2 | Start of front loading | 12 months | 21 May 2016 Dec 21st, 2016 |
CAT 3 | Financials + Alternative investment funds | 18 months | June 21st, 2017 |
CAT 4 | Non-Financials | 36 months | Dec 21st, 2018 |