On 3 December 2014, the Financial Securities and Markets Authority ("FSMA"), the Belgian Financial Sector Federation ("Febelfin"), and the Federation of Enterprises in Belgium ("FEB") issued a joint communication on the application of the European Market Infrastructure Regulation ("EMIR")[1] to non-financial counterparties.

EMIR was introduced in 2012 to mitigate the risks of OTC derivative markets by increasing transparency and liquidity and reducing counterparty and systemic risk. Title II of EMIR applies to both "financial counterparties"[2] and "non-financial counterparties". Non-financial counterparties are undertakings established in the EU other than central counterparties (CCPs) and financial counterparties.[3]

The purpose of the communication is (i) to acquaint non-financial counterparties active in derivative markets with reporting requirements and various risk-mitigation techniques under EMIR and (ii) to encourage non-financial counterparties to take the necessary steps to fully comply with all EMIR requirements.

The main requirements for non-financial counterparties under EMIR are: 

  1. to report derivative transactions to a trade repository;
  2. to clear derivative transactions falling under the mandatory clearing threshold with a CCP; and
  3. to apply certain risk-mitigation techniques to non-cleared derivative transactions.

The communication describes the requirements for non-financial counterparties in more detail and provides practical guidance on how to meet these requirements in practice. Together with the communication, the FSMA has issued a questionnaire which non-financial counterparties are required to complete and submit to the FSMA by 15 January 2015. The joint communication on EMIR is available at www.fsma.be.