Analysis of new legislation on OTC derivatives (EMIR and the Dodd-Frank Act)
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.