On January 30, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published its draft report (Draft Report), dated January 26, on the proposal for a regulation (EMIR REFIT Regulation) to amend the European Market Infrastructure Regulation (EMIR).

The proposed EMIR REFIT Regulation is part of the European Commission’s Regulatory Fitness and Performance (REFIT) program, which aims to ensure that European Union (EU) legislation delivers results for EU citizens and businesses effectively, efficiently and at minimum cost. The REFIT program aims to keep EU law simple, remove unnecessary burdens and adapt existing legislation without compromising on policy objectives. The European Commission (EC) published its legislative proposal for the EMIR REFIT Regulation in May 2017.

In the explanatory statement to the Draft Report, the reporter, Werner Langen MEP, states that he mainly supports the EC’s proposed amendments and welcomes the EC’s intention to reduce the burden on non-financial counterparties, including their intra-group transactions.

Mr Langen, however, proposes amendments with regard to the following aspects of the proposed EMIR REFIT Regulation:

• Modifying the reporting obligation to clarify that if a company under certain derivatives thresholds is contracting with a financial counterparty established in a third-country, the non-financial counterparty will not be in charge of the reporting;
• Amending the clearing obligation, including adding relief for small financial counterparties and non-financial counterparties;
• Modifying the classification of securitization special purpose entities;
• Making clearing access more effective; and
• Harmonizing, at a global level, legislation relating to physically-settled foreign exchange (FX) forwards and physically settled FX swaps.

The next step for the European Parliament is for ECON to vote on finalizing the Draft Report, before it is considered by the European Parliament in plenary session later this month.

A copy of the Draft Report is available here.

A copy of the EC’s legislative proposal for the EMIR REFIT Regulation is available here.