The financial crisis of 2008 led to new legislation and stricter regulation on trading in derivatives worldwide. The European Market Infrastructure Regulation (EMIR) requires market parties, for instance, to settle standardised derivative contracts through central counterparties. Consequently, liquidity becomes the new asset class in strategic policy.
What is EMIR?
In 2012, the European Market Infrastructure Regulation (EMIR) was introduced. This Directive covers a number of requirements for both Over-The-Counter (OTC) derivatives transactions and Exchange Traded derivatives transactions.
EMIR requires all market participants (except pension funds) to report details of all derivative contracts (e.g. interest rate swaps, credit default swaps) to Trade Repositories.