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EMIR regulation for NFCs in Ireland

Chris Hamblin, Editor, Editor, London, 2 January 2015

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The Irish Central Bank's 'Consultation on the Supervision of Non-Financial Counterparties under EMIR' ends on 30 January.

In CP90, the regulator explores this new area of regulation for which it now has responsibility. EMIR is the European Market Infrastructure Regulation. When the European Union enacts a regulation, it takes immediate effect in every subject country's law without the need for any by-your-leave from the national parliament.

NFCs are not pre-authorised (the Central Bank is not proposing to make them seek authorisation before they can deal in derivatives) to carry out the derivative activity for which they are now supervised; which means that they are likely to be unknown to the Central Bank.

The Central Bank’s supervision does not encompass every aspect of
a NFCs business activity, but is limited to its derivative activity. The bank, rather disarmingly, adds: "Simply put, we do not know what this group of NFCs do, or the rationale for why they do it."

The bank is clearly looking for ways to cut costs, and therefore corners. Thousands of NFCs seem to exist and it is worried about dissipating its resources. Cost-efficiency is the watchword.

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