While the review of the European Market Infrastructure Regulation (EMIR) was concluded in April 2024, publication of the updated Regulation is not foreseen in the Official Journal of the EU until the end of this year.

Looking ahead to some of the practical issues that may arise from the implementation of the new rules, AIMA along with the International Swaps & Derivatives Association (ISDA), the European Fund and Asset Management Association (EFAMA) and the Asset Management Group of the Securities Industry and Financial Markets Association (SIFMA AMG) have published this letter addressed to the European Commission, European Banking Authority (EBA) and the European Securities & Markets Authority (ESMA).

The letter addresses the Initial Margin (IM) Model approval requirements set out in EMIR. It focuses in particular on the challenges faced by phase 5 and 6 firms in meeting the requirement to obtain regulatory authorisation for the use of IM models and proposes that authorisation should simply consist of Phase 5 and 6 firms notifying their national competent authority (NCA) that they will be using a pro-forma IM model. NCAs may request further information or block a firm’s use of any particular model, but absent any express disapproval by the relevant NCA Phase 5 and 6 firms should be able to use the pro-forma IM model once they have notified.

AIMA will be providing guidance on the new rules under EMIR at the time of publication in the Official Journal of the EU.

If you have any questions, don’t hesitate to contact Danny O’Connell – [email protected].