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The EMIR Directive proposal, which was adopted by the Council of the European Union in May, previously required pension funds to comply with the same capital requirements as banks and hedge funds. After negotiation, the European Commission agreed to exempt pension institutions for a period of three years.
Yet Robert Gardner, co-founder and chief executive at consultancy Erdington Partners, pointed to the risk that after that, pension funds would have to comply with the EMIR proposal. "If the regulation falls away, it will require a lot of planning", he said. "Pension schemes will be required to use a prime broker to be able to post and manage those trades. The problem is that there are a lot of regulatory documents that need to be set up, so only big global banks will be able to play the role of prime broker."
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