The Complete Guide to EMIR: European Market Infrastructure Regulation Explained
This article is written by Kantox What is EMIR and Why Does It Matter? The European Market Infrastructure Regulation (EMIR) is a comprehensive regulatory framework enacted by the European Securities and Markets Authority (ESMA), which came into force on February 12, 2014. Its primary aim is to more tightly supervise the trading of over-the-counter (OTC) derivatives through controlled initiatives, ultimately to mitigate the possibility of another global financial crisis and minimize risks associated with derivative markets. EMIR requires that over-the-counter derivatives—including interest rate derivatives, credit derivatives, fixed income derivatives, and foreign exchange derivative transactions (forward contracts, options, and swaps)—must comply with its regulatory processes. This regulation has an extensive effect on both corporate organisations and financial institutions, though corporates often find adherence more challenging than banks and other financial entities. The Three Core Components of EMIR There are three main components to EMIR compliance: EMIR includes both financial entities (banks, building societies, pension funds) and non-financial entities (any businesses that use derivatives under EMIR’s remit, regardless of sector). Both parties in each transaction must comply with the protocol conditions required. Which FX Transactions Fall Under EMIR? FX Spot Transactions Crucially for many FX derivative users, ESMA has confirmed that spot transactions are exempted from EMIR’s remit. Spots are generally trades settled within two days of the transaction (T+2). The Central Bank of Ireland understands that “all FX transactions with settlement beyond the spot date are to be considered Forward contracts and therefore fall within the definition of a derivative as provided for under EMIR and will be subject to the reporting obligation.” FX Swaps and Forward Derivatives Swaps must go through the EMIR mandatory reporting stage. A swap is a contract between two parties, where an agreement for a series of specified future cash exchanges on specified dates is made. Forward contracts, where two parties agree to a future trade of an asset at an agreed price on a future date, must also comply with EMIR reporting obligations. The main difference between a swap and a forward is that a forward is one transaction on one agreed future date, whereas a swap is a sequence of agreed transactions on various future dates. Note: There has been some ambiguity regarding the definition of forward contracts, particularly FX forwards. ESMA sought clarification from the European Commission on this matter. UK and EU Conflict Over EMIR FX Forwards In the UK, due to differences in how the Financial Conduct Authority interprets the EU definition of “derivative,” there has been uncertainty about whether foreign exchange forwards would be exempt from EMIR in the UK. However, as the EU classifies FX forwards as a “predominant risk,” it is expected that the UK will eventually align with EU requirements. The EMIR Compliance Checklist: Step-by-Step Guide To ensure full compliance with EMIR requirements, particularly the reporting component, follow these steps: 1. Obtain a Legal Entity Identifier (LEI) for each entity ESMA uses Legal Entity Identifiers to distinguish between different derivative users. You must obtain an LEI for your company from an authorized issuer. For more information, visit the LEI ROC website. 2. Identify all your derivative transactions This step is imperative in distinguishing which of your derivative transactions fall under EMIR’s remit. 3. Identify what EMIR stages each derivative class is subject to Determine which derivatives are subject to all three EMIR components (clearing, risk-mitigation, and reporting) and which are subject to reporting only. 4. Exchange data with counterparties For each derivative transaction under EMIR, both parties must fulfill the requirements. Obtain all pertinent information on your counterparties, such as their LEI, and provide them with your information. 5. Clarify UTI generation Each transaction requires a Unique Transaction Identifier (UTI), generated by one of the two counterparties. Discuss in advance who will generate the UTI for each transaction. 6. Decide how to manage EMIR reporting Your company can handle reporting internally or outsource to a third-party service provider. Many financial service providers offer complete EMIR reporting and advisory services to clients. 7. Select a Trade Repository (TR) Choose which of the six ESMA-approved Trade Repositories you will report to, based on your specific needs. Complete all necessary implementation steps once confirmed. 8. Begin the reporting process Start reporting either via a third-party service or through self-reporting. Understanding Trade Repositories Under EMIR A fundamental part of the EMIR framework includes the obligatory reporting of all applicable derivative transactions to registered Trade Repositories. TRs are entities that compile and store derivative transaction data in a continually updated database. Their importance in European financial regulation is attributed to the recognized need for improved transparency and reduced financial systemic risk. Current ESMA-Registered Trade Repositories: Selecting the Right TR for Your Business When choosing a Trade Repository, consider: The Impact of EMIR on Businesses EMIR’s main impact on entities trading FX derivatives is the significant costs and time spent on implementation and continual compliance. Another considerable challenge is understanding the specific requirements for each type of FX derivative transaction due to ambiguity in EMIR’s stipulations. For many businesses, especially non-financial entities, compliance can be resource-intensive, potentially diverting attention from core business activities. However, these measures are designed to create a more stable and transparent derivatives market, which should benefit all participants in the long term. Conclusion: Preparing Your Business for EMIR Compliance EMIR will undoubtedly have an extensive effect on your organization if you trade derivatives. Being properly prepared and understanding the requirements is essential to ensure smooth compliance and avoid potential penalties. For businesses looking to navigate EMIR requirements efficiently, consulting with financial compliance experts or partnering with service providers who offer EMIR compliance services can significantly reduce the burden of implementation and ongoing reporting obligations. This article combines information on EMIR and provides a general overview of EMIR requirements as of May 2025. For the most current regulatory information, please consult with financial compliance professionals or regulatory authorities. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in Treasury Management or those interested in learning more…
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Şişecam issues first Working Capital Note™ under multi-million dollar facility, launching new phase of liquidity strategy
This is a Press Release from our Partner, ETR Digital London / Istanbul – January 21st Şişecam, the specialist glass and chemicals manufacturer, has completed the issuance of its first Working Capital Note™ (WCN) under a multimillion-dollar working capital facility. The transaction took place on 30 December 2025 and was financed by İşbank, issued via the Faturalab platform and enabled by ETR Digital’s award-winning Flownote™️ technology. It represents the first live use of this structure within Şişecam’s treasury operations and establishes the framework for further issuances as the programme scales. WCNs are digital instruments designed to help buyers optimise payment terms while delivering faster and fuller settlement to suppliers, compared to traditional invoice finance. Backed by verified trade and invoice data, WCNs delivered through Flownote™️ provide a more flexible and efficient alternative, particularly for multicountry operations. Barış Gökalp, Treasury Director at Şişecam, said: “Şişecam operates within a highly dynamic structure shaped by multiple markets, a broad and diverse supplier ecosystem, and varying payment terms. To manage our working capital more proactively across this complex landscape, we were looking for a scalable and modern financing instrument. Working Capital Notes provide exactly that — a flexible, data-driven solution that aligns with the way our global business operates. This inaugural issuance marks only the first step; we expect the program to expand significantly in the coming period as we continue to embed this structure across our international footprint.” With 43 production facilities in 12 countries and a global workforce of over 23,000 employees, Şişecam collaborated closely with its banking and technology partners to deploy the WCN structure rapidly and reliably, demonstrating how effectively the instrument can function in real operational environments. Volkan Guran, Director of Corporate & Trade Finance, İşbank London, commented: “We are delighted to work alongside Şişecam, Faturalab and ETR Digital in pioneering working capital innovation. From a bank’s perspective, the WCN structure is compelling because it combines legal certainty with high-quality, verified data. It allows us to support Şişecam using a familiar risk framework, while benefiting from the efficiency and transparency of a fully digital instrument.” The WCN was structured and executed through Faturalab, which acts as the orchestration layer between corporates, banks and digital instrument infrastructure. By embedding the instrument directly into existing accounts payable workflows, Faturalab enables scalable deployment of digital working capital solutions with minimal operational friction. Emre Aydin, CEO, Faturalab, said: Manufacturers have traditionally struggled to access affordable working capital finance, especially in the Turkish market. Thanks to our partnership with ETR Digital, Faturalab now enables approved invoices to be converted into digital instruments that banks and other funders can finance in real-time. Şişecam has proved this works in practice, with the whole project being delivered in just 10 working days. Kudos to Baris and his team for blazing the WCN trail – other corporates and SMEs across the globe can now deploy the same scalable solution.” Dominic Broom, CEO, ETR Digital, added: “Şişecam’s leadership has shown what’s possible when treasury teams embrace innovative digital technology like Flownote to solve real-world liquidity challenges. WCNs are relatively new to the treasury toolkit, but they enable companies to optimise their working capital and finance 100% of the instrument value, while giving them immediate access to deep pools of liquidity on an as needs basis. We look forward to working further with Şişecam and our partners in 2026, as well as helping more companies to unlock value across global supply chains in a way that’s scalable, practical, secure, and affordable.” Additional WCN transactions are expected in the coming months as Şişecam continues to roll out the facility across its international operations. Patrick Kunz, Treasury Masterminds Founder/Board Member, added: Working capital & trade finance are two of the last tasks in treasury to digitalise and automate. It was dependent on paperwork or manual upload/transfer of documents. With these notes, it will be easier for companies to turn company-specific invoices and trade into standard financing instruments. Easier for banks to issue and finance. Both locally and later also internationally. I hope to see more such deals in the future. Opening up the market for more trade and working capital financing, not only for big multinationals with complex structures and strong creditors. Great trend, worth following. Notes to Editors About Şişecam: A global industrial group specialising in flat glass, glassware, glass packaging and chemicals, Şişecam is headquartered in Türkiye. The company has 43 production facilities in 12 countries and sells to customers worldwide across a wide range of industrial and consumer markets. About İşbank: Türkiye’s largest private bank, İşbank provides corporate, commercial and trade finance services to clients across domestic and international markets. About Faturalab: Faturalab is a working capital and supply chain finance platform that embeds digital financing tools into operational workflows, connecting corporates, suppliers and financial institutions. About ETR Digital: ETR Digital is a UK-based fintech specialising in digital working capital finance. Its Working Capital Note™ solution enables companies to enhance liquidity, reduce operating costs, and improve EBITDA by optimising working capital. Source: Şişecam issues first Working Capital Note™ under multi-million dollar facility, launching new phase of liquidity strategy Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below. Notice: JavaScript is required for this content.