MFA and AIMA Submit Joint Letter to ESMA Proposing Q&As on EMIR

MFA and AIMA jointly submitted a letter to the European Securities and Markets Authority (ESMA) with a list of questions and answers (Q&As) on key areas of uncertainty in the European Market Infrastructure Regulation (EMIR).  In particular, in the letter, MFA and AIMA provided proposed Q&As:

  • seeking clarification of the correct classification of alternative investment funds (AIF) under EMIR based on the jurisdiction of organization of the AIF and its alternative investment fund manager.
  • with respect to counterparty obligations arising on March 15, 2013, requesting that ESMA clarify the general application of EMIR to third country entities as well as various aspects of the daily valuation requirement, including the meaning of term “outstanding contracts.”
  • with respect to counterparty obligations potentially arising on July 1, 2013 for credit and interest rate derivatives and January 1, 2014 for all other classes of derivatives, seeking clarity on: (1) the scope of the reporting obligation under Article 9 of EMIR; (2) the requirement to report “without” duplication;” (3) whether parties must report mark-to-market or mark-to-model values for OTC derivative contracts terminated prior to the reporting start date; and (4) whether parties must report mark-to-market or mark-to-model values for OTC derivative contracts entered into prior to the reporting start date.
  • with respect to counterparty obligations arising on September 15, 2013, addressing whether the dispute resolution, portfolio reconciliation and portfolio compression requirements under Article 11 of EMIR apply to uncleared OTC derivative contracts entered into prior to the date on which such requirements first apply

seeking clarification on parties’ ability to rely on a European Commission determination that a third country’s laws are equivalent to EMIR, if the parties are complying with the third country’s laws, even though neither party is established in the third country.

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