FMLC’s paper on EMIR highlights significant legal uncertainties in the current draft of the regulation. It is concerned about:

  • scope in terms of both parties and eligible contracts;
  • civil law consequences of breach of clearing requirements;
  • front loading;
  • segregation and clearing models;
  • default procedures and portability;
  • different methods of taking collateral;
  • settlement finality issues and issues relating to central counterparty insolvency;
  • interference with the ISDA automatic early termination election; and
  • regulatory capital.

(Source: FMLC Identifies EMIR Problems)