European Market Infrastructure Regulation (EMIR) entered into force on 16 August 2012 (UE N 648/2012) and aimed to increase the stability of European OTC derivatives market by introducing:

  • – Clearing obligation for eligible OTC derivatives in order to reduce counterparty risk
  • – Measures to reduce operational risk for other derivatives
  • – Reporting obligation for OTC derivatives through a central trade repository in order to improve transparency

GMS has extensive expertise in implementing solutions to respond to these new regulations on OTC derivatives.



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EMIR Clearing Obligation

From 2014, obligation to clear some OTC derivatives

GMS Solution:   Implementation of clearing features into Summit via APIs.

  • Static Data enrichment – Customer Classification
  • Trade capture – Clearing information (clearing member, original counterparty), Clearing flags, SSI defaulting logic
  • STD extension – New actions for clearing
  • Monitoring – BVS extension, changes on Finders and blotters
  • STP API – inhibit payment generation for cleared trades
  • Reporting – specific reports based on clearing broker statements


EMIR Risk Mitigation

For non-centrally cleared trades, obligation to follow specific rules to monitor operational and counterparty risk.

Amongst others:

  • Portfolio reconciliation
  • Timely confirmation

GMS Solution:

  • Portfolio reconciliation: ISDA MMS csv file generator to facilitate exchange of information and integration with reconciliation tool.
  • Timely confirmation: Summit STP implementation, restructuring of existing STP processes to speed up the sending of confirmation, Implementation of Financial/non-financial features.


EMIR Reporting Obligation

Obligation to report to central repository, contracts details of OTC derivatives (cleared or non-centrally cleared)

GMS’s Functional architecture proposal: