On April 13, the International Swaps and Derivatives Association, Inc. ("ISDA") published an updated classification letter that enables counterparties to notify each other of their status for clearing and other regulatory requirements under the European Market Infrastructure Regulation ("EMIR").
The updated letter covers the clearing obligation for certain interest rate derivatives classes denominated in EEA currencies and certain credit default swap index classes. The ISDA EMIR classification letter allows market participants to bilaterally communicate their status to their counterparties by answering a series of questions.
The updated letter makes several substantive amendments, including:
- aligning the definition of "Category 1 entity" to the one used in the final, published version of the G-4 interest rate products regulatory technical standards ("RTS") (which come into force from June 2016); and
- providing the ability for entities to make classifications in respect of the draft RTS for EEA rates and the RTS on credit default swap index classes.
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