On September 3, 2014, the UK Financial Conduct Authority (“FCA”) published a review finding factsheet on the calculation of the clearing threshold by non-financial counterparties (“NFCs”) and their compliance with the European Market Infrastructure Regulation (“EMIR”). The review, which was conducted in June 2014, focused on energy and oil producers and their approach to defining hedging activity and monitoring their status against the clearing threshold. The FCA review found that: (i) NFCs are accurately identifying hedging and non- hedging transactions; (ii) some issues are evident on trade reporting in relation to data retrieval and mismatching; (iii) a move towards electronic confirmation needs to be encouraged; and (iv) NFCs have adequate portfolio reconciliation arrangements in place. The FCA has conducted several similar reviews on the implementation of EMIR, most of which focus on the clearing threshold and reporting obligation.

The FCA factsheet is available at:

http://www.fca.org.uk/static/documents/emir-factsheet-energy-and-oil-producers.pdf.