Edmund Parker, global co-head of the derivatives and structured products group at Mayer Brown, said the uncertainty surrounding the new requirements under EMIR, as well as the short timeframe in which pension funds have had to comply, mean many are unprepared for today's introduction of the new regulation.
Among EMIR's requirements – which meet the G20 commitments agreed in Pittsburgh in 2009 on reducing systemic risk and bringing more transparency to OTC and listed derivatives markets – one aims to pull all trading in over-the-counter derivatives (OTCs) through central clearing. Although pension funds have been granted a temporary exemption from that requirement, they will still have to comply with other obligations. "The real issue lies in the technical standards from which pension funds are not exempt and which include risk mitigation and reporting obligations", Parker said.
Parker urged pension funds to check whether their asset managers were ready to comply with the EMIR requirements. "A lot of the managers have already been doing all the preparation required for EMIR, but it is worth checking", Parker said.
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