Analysis of new legislation on OTC derivatives (EMIR and the Dodd-Frank Act)
Business Case
The European Market Infrastructure Regulation (EMIR) has presented a significant challenge for the compliance department of an international bank. The timely implementation of this regulation has proven to be difficult, and as a result, the department has struggled to ensure compliance. This has put the bank at risk of non-compliance fines and reputational damage.
The challenge faced by this bank was the need to analyze new legislation in the field of OTC derivatives, specifically the European Market Infrastructure Regulation (EMIR) and the Dodd-Frank Act, and translating this into new policies and procedures. This included not only developing trade reporting and bilateral and marginal (central) clearing obligations arising from EMIR and DFA, but also analyzing the extraterritorial applicability of the Volcker rule and the obligations it entails for both US and non-US banks regarding trading for their own account, which is a complex and time-consuming process.
Our solution addressed the need for a comprehensive policy framework that is compliant with current regulatory requirements and industry best practices. We proposed to design an entirely new policy framework that includes standards and procedures to ensure compliance and consistency in implementation.
In addition, to ensure that all management and employees are equipped to comply with the new policy framework, we provided training for management and employees in Amsterdam, Vienna and Prague.
• The bank has a clear policy framework for investment services that complies with EMIR.
• Management and employees are well acquainted with the new policy and are able to implement it correctly.
• Implementation of a new treasury product (hyper deposit with currency option).