An interest rate swap, an FX forward or a commodity hedge brings you under Regulation (EU) 648/2012 (EMIR): reporting, FC/NFC classification, risk mitigation and, with EMIR 3, the active account at EU CCPs. We put it all in order and document it for you.
Signing derivatives? Free EMIR review
Tell us which derivatives you use and with whom, and we will tell you your classification, your obligations and the gaps you have today.
Six building blocks so your derivatives keep hedging risks without creating a new one: regulatory risk.
We classify your entity (FC, NFC+ or NFC-), inventory your derivatives, check your reporting against the EMIR Refit formats and build the calendar of obligations with owners and evidence. A system, not an annual scare.
Master agreements, confirmation and reconciliation schedules, collateral agreements and dispute resolution clauses: the contractual architecture that supports the risk mitigation techniques required by EMIR.
Swaps, futures, options and forwards: we determine which of your company’s contracts are derivative financial instruments and which are not.
Margin, collateral and prudential requirements: how your derivatives fit into the capital picture of a regulated entity.
If your investment firm trades or brokers derivatives, EMIR is added on top of your license: we align both frameworks for you.
We review reporting, thresholds and risk mitigation the way the supervisor would: findings, remediation plan and follow-up.
EMIR is not just for banks: it reaches any counterparty to a derivative. These four cases come through our door often.
“We sign swaps for our financing and FX forwards for our exports. Nobody in the company knew that those contracts are reported to a trade repository and that we are an NFC with obligations of our own.”
“Our volume of commodity hedges grows every year. The question that keeps us up at night: at what point do we stop being an NFC- and our whole regime changes?”
“As a financial counterparty we take on the full EMIR package, and with EMIR 3 we have to analyze the active account at an EU CCP. We need to turn that into procedures, not headlines.”
“When I took over as finance director, I found live derivatives with no inventory, loose confirmations and zero traceability of the reporting the bank does on our behalf. I want order and a clear owner.”
Problems with EMIR rarely come from bad faith: they come from believing that “the bank handles that.” These are the failures we find most often.
Reporting without control: delegating submission to the bank does not delegate responsibility. If nobody in your company checks what is reported, with what data and in which Refit formats, the errors are yours and they pile up silently.
Unmonitored thresholds: NFC- status is not a lifetime title: it depends on your positions. Growing in derivatives without monitoring the clearing thresholds can change your regime without you noticing.
Derivatives without a contractual architecture: trading uncleared OTC derivatives without a master agreement, without confirmation deadlines and without a collateral agreement leaves EMIR’s risk mitigation techniques up in the air and gives disputes no channel.
| Classification | Who it is | Main obligations |
|---|---|---|
| NFC- | Non-financial counterparty below the clearing thresholds. | Reporting to a trade repository and basic risk mitigation techniques for uncleared OTC derivatives (timely confirmation, portfolio reconciliation, dispute resolution). |
| NFC+ | Non-financial counterparty that exceeds any clearing threshold. | All of the above plus enhanced obligations: clearing on the terms set by the applicable rules and exchange of collateral for uncleared contracts, as the case may be. |
| FC | Financial counterparty (banks, insurers, funds, investment firms...). | The full package: reporting, clearing where applicable, margin for uncleared contracts and, with EMIR 3, analysis of the active account requirement at EU CCPs for certain derivatives. |
Contract inventory, FC/NFC classification with threshold monitoring, checks on your Refit reporting, documented risk mitigation techniques and an EMIR 3 roadmap. You come away with a complete compliance framework and an owner for each obligation.
EMIR is Regulation (EU) 648/2012, the European regulation on over-the-counter (OTC) derivatives, central counterparties and trade repositories. It was adopted after the financial crisis to bring transparency to the derivatives market and reduce its counterparty risk.
It applies to both sides of every contract: financial counterparties (FCs)—banks, insurers, funds, investment firms—and non-financial counterparties (NFCs), that is, companies in any sector that sign derivatives, even if only to hedge interest rates or currency.
Yes. The obligation to report to a trade repository covers derivatives regardless of their purpose: hedging your financing or your exchange rate risk does not exempt you from having the transaction reported.
Usually the financial institution reports on the company’s behalf, and in certain cases the rules provide mechanisms to shift the reporting of small NFCs onto the financial counterparty. But be careful: you should agree in writing who reports, with what data and how you check that it is done properly.
EMIR Refit overhauled the transaction reporting regime and, in particular, its technical formats: since April 2024, reporting has been done under the new standards, with more fields and higher data quality requirements.
For companies, the practical consequence is twofold: check that whoever reports (the bank or a third party) has migrated correctly, and clean up your own data—identifiers, trade references, valuations—that feeds those submissions. Reporting that is formally delegated but uncontrolled in practice is the most frequent finding in our reviews.
EMIR classifies non-financial counterparties by measuring their derivative positions against clearing thresholds set per asset class. Broadly speaking: if your positions—excluding, where applicable, hedges linked to your commercial activity—stay below the thresholds, you are an NFC- and bear the lighter regime; if you exceed them, you become an NFC+ and enhanced obligations kick in, including clearing on the terms set by the applicable rules.
The mechanism requires a periodic, traceable calculation: your classification is not a snapshot, it calls for continuous monitoring.
For OTC derivatives that are not cleared through a CCP, EMIR imposes operational disciplines that reduce bilateral risk:
All of them need contractual support: that is why the contractual framework is half of EMIR compliance.
EMIR 3 (Regulation (EU) 2024/2987) is the latest major reform of the framework. Its most discussed element is the active account requirement: certain counterparties subject to the clearing obligation must hold an operational account at an EU central counterparty (CCP) for certain derivatives, with the aim of reducing dependence on clearing houses outside the Union.
If you are an FC or an NFC+ with derivatives in scope, you need to analyze whether it applies to you, choose a CCP and adapt your contracts and operations. It is a project with a timeline, not a formality.
Supervision lies with the competent authorities depending on the type of entity; for many Spanish counterparties, the point of contact is the CNMV. Breaching EMIR obligations can lead to requests for information and administrative penalties on the terms set by the applicable rules, on top of the operational damage: a history of incorrect reporting is expensive to rebuild.
The best defense is boring: a live inventory, designated owners and evidence for each obligation. That is what we set up through our financial compliance service.
For an FC, EMIR sits alongside everything else: the authorization and program of activities of the investment firm (ESI), prudential and regulatory capital requirements, and conduct rules toward clients. The margin and collateral on your derivatives have a prudential side; your derivatives activity must be reflected in your procedures and your risk control.
The classic mistake is treating EMIR as a back-office silo. It works when it is built into the entity’s full map of obligations.
Complying with EMIR means answering three questions with evidence: which derivatives you have, what you are (FC, NFC+ or NFC-) and who handles each obligation. This is how we work.
We draw up the inventory of live derivatives (financing, currency, commodities), separate out the hedges and calculate your position against the thresholds. That gives us your classification and, with it, your entire regime.
We audit your Refit reporting—who submits, with what data, under what control—and close the contractual architecture: master agreement, confirmations, reconciliation, disputes and collateral where applicable.
We leave in place periodic threshold monitoring, the table of owners and evidence, and the EMIR 3 roadmap: active account analysis, choice of CCP and adaptation of your operations if it applies to you.
If your derivatives sit alongside an entity license, also review the investment firm (ESI) authorization and regulatory capital: EMIR compliance works when it is integrated, not run in parallel.
Nine concepts that come up in every confirmation, every request for information and every conversation with your bank about derivatives. They are worth getting right.
The European regulation on OTC derivatives, central counterparties and trade repositories. It applies to financial and non-financial counterparties.
A contract negotiated bilaterally outside organized markets. It is the ground on which EMIR concentrates its risk mitigation techniques.
Banks, insurers, funds, investment firms and similar entities: by default, they bear the full package of EMIR obligations.
Any company that signs derivatives without being a financial institution. It is split into NFC- and NFC+ depending on the clearing thresholds.
Position levels per asset class which, once exceeded, turn an NFC- into an NFC+ and trigger enhanced obligations. They require periodic calculation.
An entity registered with ESMA that receives and stores the data on each reported derivative. It is the source the supervisor checks you against.
The clearing house that steps in between the parties to a cleared derivative, mutualizing counterparty risk through margin and collateral.
Timely confirmation, portfolio reconciliation, dispute resolution and, depending on the counterparty, exchange of margin on OTC derivatives not cleared through a CCP.
A requirement of Regulation (EU) 2024/2987: certain counterparties must hold an operational account at an EU CCP for certain derivatives.
Knowing at all times whether you are an FC, NFC+ or NFC-, with a methodologically consistent threshold calculation.
Classification memo, periodic position calculations and notices to counterparties.
All transactions reported to the trade repository under the Refit formats, with high-quality data.
Delegation agreement, trade repository extracts and reconciliation checks on what has been reported.
Terms of each OTC derivative confirmed on time and portfolios reconciled at the required frequency.
Filed confirmations, reconciliation records and a log of disputes with their resolution.
Periodic valuation of positions and exchange of margin where the classification requires it.
Collateral agreements, documented valuations and traceability of margin calls.
Analysis of whether the active account requirement reaches your derivatives and, if so, an adaptation plan.
Applicability report, contract with the CCP or clearing member, and project plan.
Five symptoms we often see in the first review. Any one of them justifies an audit of your EMIR compliance framework.
Derivatives touch several layers at once: the definition of a financial instrument, the contracts that document them, the capital of whoever signs them and the license of whoever brokers them. These pages give you the context so that your EMIR compliance framework fits into the whole.
What a derivative is for regulatory purposes and where the scope begins: the question that comes before any EMIR obligation.
Master agreements, collateral and schedules: the documentary support without which risk mitigation techniques do not exist.
Margin, exposures and own funds: the prudential reading of your derivatives portfolio if you are a regulated entity.
How to integrate EMIR into a compliance program with owners, a calendar and evidence, instead of living it as a series of scares.
If you are a regulated entity, complete the picture with investment firm (ESI) authorization and risk control before the CNMV. And if the problem is internal governance, see internal audit and the three lines of defense.
Tell us which derivatives your company or institution enters into (hedging, trading, volumes) and we will send you back your map of EMIR obligations.
Regulation (EU) 648/2012 (EMIR) organizes the European derivatives market around three pillars: transparency (reporting of all transactions to authorized repositories), reduction of counterparty risk (central clearing for certain contracts and risk mitigation techniques for the rest) and supervision of market infrastructures. Its most misunderstood feature is its personal scope: it applies to both financial counterparties (FCs) and non-financial counterparties (NFCs), so an industrial company that signs an interest rate swap or an FX forward is already in scope. And the framework keeps evolving: the EMIR Refit reporting formats have applied since April 2024, and EMIR 3 (Regulation (EU) 2024/2987) adds the active account requirement at EU CCPs.
Each derivative is reported to a trade repository supervised by ESMA, under the EMIR Refit technical formats in force since April 2024, which are more demanding in terms of fields and data quality. In practice, many companies delegate submission to their financial institution—and the rules facilitate that in certain cases—but operational delegation does not remove the need for control: you must agree in writing who reports, feed the process with correct data and periodically check what has actually been reported. Uncontrolled reporting is the number one finding in our financial compliance reviews.
EMIR scales obligations to the nature of the counterparty. FCs bear the full regime. NFCs are measured against clearing thresholds per asset class: as long as their positions—excluding, where applicable, hedges linked to their commercial activity—stay below them, the company is an NFC- and its burden is concentrated on reporting and basic risk mitigation; if any threshold is exceeded, it becomes an NFC+ with enhanced obligations, including clearing on the terms set by the applicable rules. The operational consequence: the calculation must be repeated and documented, because the classification follows the volume of the business, not the letterhead. The definition of the instrument scope is covered in securities markets and financial instruments.
For derivatives that are not cleared through a CCP, EMIR imposes bilateral disciplines: timely confirmation of terms, periodic portfolio reconciliation, dispute resolution procedures and, for the counterparties required to do so depending on their classification, valuation and exchange of margin. None of this works without a legal architecture: master agreements, schedules and collateral agreements that set deadlines, formats and consequences. We build that layer through our commercial contracts practice, and its prudential side—exposures, collateral, own funds—through regulatory capital.
Regulation (EU) 2024/2987 (EMIR 3) introduces, among other measures, the active account requirement: certain counterparties subject to the clearing obligation must hold an operational account at an EU central counterparty for certain derivatives, in order to reduce excessive dependence on third-country CCPs. For the FCs and NFC+ affected, this translates into a project: analyzing the scope, contracting a CCP or clearing member, adapting contracts and demonstrating that the account is operational. Licensed entities must also integrate it into their overall framework; we cover this under investment firm (ESI) authorization.
Key legislation, linked to the official text:
Legislation and links reviewed in .