European Market Infrastructure Regulation (EMIR)

On 16 August 2012, Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation or EMIR) entered into force. On 17 June 2019, EMIR was amended by Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 (EMIR Refit).

EMIR applies to all financial counterparties (FC) such as credit institutions, investment firms or UCITS, and to non-financial counterparties (NFC) such as corporates, professionals of the financial sector that do not qualify as FCs or securitisation vehicles. Moreover, it applies indirectly to non-European counterparties trading with European counterparties.

EMIR lays down among others the following requirements:

• To report all derivatives contracts to a trade repository (TR) (Article 9 of EMIR);
• To assess a counterparty’s status compared to the clearing threshold and if relevant notify the CSSF and ESMA thereof (Articles 4a and 10 of EMIR);
• To centrally clear certain OTC derivative contracts (Article 4 of EMIR);
• To apply risk-mitigation techniques for OTC derivative contracts that are not centrally cleared through a central counterparty (CCP) (Article 11 of EMIR).

Nevertheless EMIR foresees certain exemptions for intragroup OTC derivative contracts:

• Exemption from the clearing obligation for certain asset classes (Article 4(2) of EMIR);
• Exemption from the bilateral exchange of margins (Articles 11(6) to 11(10) of EMIR);
• Exemption from the reporting obligation (Article 9(1) of EMIR).

In addition, EMIR sets out rules for the authorisation, the registration and the supervision of, as well as requirements applicable to, CCPs and TRs.

Under Articles 4a and 10 of EMIR, as amended by EMIR Refit, where a counterparty (FC or NFC) does not calculate its positions against the clearing threshold, or when the result of the calculation exceeds the clearing thresholds, the counterparty is required to immediately notify the CSSF and ESMA.

The counterparty should also notify the CSSF and ESMA when it no longer exceeds the clearing thresholds.

For the notification to the CSSF, when a counterparty exceeds or no longer exceeds a clearing threshold, the interactive form available below shall be used. Modified or incomplete templates cannot be accepted for this purpose.

For the notification to ESMA please refer to the procedures described on the ESMA website under the section post-trading.

As defined in Article 4(2) of EMIR, FCs established in Luxembourg where the CSSF is the competent authority and NFCs established in Luxembourg can make use of the exemption from the clearing obligation for intragroup transactions in OTC derivatives contracts.

They have to notify or apply to the CSSF not less than 30 calendar days before the intended use of the exemption.

FCs and NFCs should use the interactive form available below.

As defined in Article 11(6) to 11(10) of EMIR, FCs established in Luxembourg where the CSSF is the competent authority and NFCs established in Luxembourg can make use of the exemption from the exchange of collateral obligation for intragroup transactions in OTC derivatives contracts.

Counterparties are required to submit an external legal opinion in relation to the criteria of Art. 33 of Commission Delegated Regulation 2016/2251, as amended.

They have to notify or to apply to the CSSF before the intended use of the exemption by using the form available below.

As defined in the third subparagraph of Article 9(1) of EMIR, FCs established in Luxembourg where the CSSF is the competent authority and NFCs established in Luxembourg can make use of the exemption from the reporting obligation for OTC contracts concluded with intragroup counterparties, where at least one of the counterparties is an NFC or would be qualified as a NFC if it were established in the Union.

They have to notify the CSSF not less than three months before the intended use of the exemption by using the form available below and send it filled by email to emir@cssf.lu.

Furthermore, each notification for intragroup exemption from reporting must be accompanied by the form ‘Information by non-financial counterparties and RAIFs’ specified below.

The CSSF accepts only notifications for intragroup exemption from reporting which contain all the elements specified in this section and in the related forms.

FCs established in Luxembourg where the CSSF is the competent authority shall report to the CSSF any disputes between counterparties relating to an OTC derivative contract, its valuation or the exchange of collateral for an amount or a value higher than EUR 15 million and outstanding for at least 15 business days in accordance with Article 15(2) of Commission Delegated Regulation (EU) No 149/2013 of 19 December 2012.

For this notification FCs shall use the form available below.

The CSSF requires all NFCs that are not subject to prudential supervision and RAIFs, which conclude derivative transactions (OTC and ETD) to provide the CSSF with details of the person responsible for ensuring the on-going compliance with EMIR.

As defined in Article 9(1) of the ITS on reporting and further clarified in section 4.29 of the Guidelines for reporting under EMIR, Entities Responsible for Reporting where the CSSF is the competent authority shall notify the CSSF in case of:

• Any misreporting caused by flaws in the reporting systems that would affect a significant number of reports.
• Any reporting obstacle preventing the report submitting entity from sending reports to a trade repository within the deadline referred to in Article 9(1) of Regulation (EU) No 648/2012.
• Any significant issue resulting in reporting errors that would not cause rejection by a trade repository in accordance with Commission Delegated Regulation (EU) 2022/1858.

Starting on 24 December 2024, where a financial counterparty (FC) or a non-financial counterparty (NFC) becomes subject to the obligation to hold an active account in accordance with Article 7a(1) of EMIR, that FC or NFC shall notify CSSF and ESMA at the same time.

For the purpose of notifying CSSF when counterparties are subject to the active account requirement under Article 7a(1), FCs and NFCs must use the notification template provided by ESMA, available on its website https://www.esma.europa.eu/central-counterparties/ccp-policy under the menu “Active Account Notification” and send it with the same email to both:

• AAR-notifications@esma.europa.eu
• emir@cssf.lu

Please do not modify the structure of the template file (e.g. number of sheets, sheet names) or the format of the document (i.e. the xlsx Excel file format). Documents sent with a different structure or in a different format (e.g. PDF) will not be considered.

Please note that notification template should only be submitted through these dedicated email addresses and not via eDesk.

The model validation procedure for the calculation of initial margin models (IMMV) under Article 11(3) of Regulation (EU) No 648/2012 (EMIR) as amended is primarily managed at the level of the European Banking Authority (EBA). In addition to its central validation function for the so-called “pro forma” models such as the ISDA SIMM model, EBA will also issue guidelines or recommendations (Article 11(3), sixth subparagraph of the EMIR) and a specific draft RTS on IMMV (Article 11(15)(aa) of the EMIR) respectively. It has already published an Opinion regarding initial margin (IM) models which essentially states that IM models already in use can continue to be used by market participants. The Opinion also contains a preliminary list of information to be submitted at this juncture to competent authorities with respect to the first and subsequent applications for initial margin model authorisations.

The obligation to submit the relevant information is triggered by the first model change after EMIR 3 came into force on 24 December 2024. For this purpose, it is important to note that the recalibration of a model is also considered a model change.

As the ISDA SIMM model, which is predominantly used in the market, has been recalibrated in July 2025, counterparties are expected to submit the information required by the EBA as soon as possible. Once counterparties have submitted the information specified in the said EBA Opinion, it will be sufficient to report all subsequent model changes, together with the latest data available at that time, on a recurring annual basis by 31 March of each year. In so doing, counterparties should use the standardised template provided on the CSSF website for the submission.

The documents must be submitted to the CSSF via the email address emir@cssf.lu by including:

“IMM Application: [EMIR3][YYYYMMDD][LEI of Notifier]_[IMMA]” in the subject line.

The template file attached shall be renamed using the following format:

<EMIR3>_<YYYYMMDD>_<LEI of notifier>_<IMMA>.xlsx

where:

<EMIR3>: fixed prefix

<YYYYMMDD>: notification submission date

<LEI of notifier>: 20-character Legal Entity Identifier (ISO 17442)

<IMMA>: fixed suffix (Initial Margin Model Application)

Example: EMIR3_20250724_1XX82A73R8T389I83N23_IMMA.xlsx

The structure of the template file (e.g. number of sheets, sheet names) and the format of the document (i.e. the xlsx Excel file format) shall not be modified. Documents sent with a different structure or in a different format (e.g. PDF) will not be considered. Please note the naming convention for email titles and file names.

Please note that the notification template should only be submitted through this dedicated email address and not via eDesk.

Note that significant institutions (SI) as defined in Article 6 of Council Regulation (EU) No 1024/2013 of 15 October 2013 shall follow the frequently asked questions (FAQ) published on the ECB website requiring among others that all IM model applications should be submitted to the relevant Joint Supervisory Team (JST) as defined in Article 2, point (6) of Regulation (EU) No 468/2014:

https://www.bankingsupervision.europa.eu/ecb/pub/html/ssm.emir3faqs202501~2ef1994a55.en.html

In such a case the SIs are requested to submit their application form directly to their JSTs by adding the dedicated email address emir@cssf.lu in cc.