Emir Survey Results


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Emir Survey Results

  1. 1. EMIR Survey ResultsFebruary 2013For Institutional InvestorsOn Monday 4 February, Redington partnered with Morgan Stanley to present pension fund stakeholderswith an education session on “2013 – The Year of EMIR”.The session focused on new OTC regulations planned by the European Securities and Markets Authority(ESMA), exploring the impact on pension funds from the proposed changes and how pension funds cantake action to prepare themselves and optimise their transition into the new regulatory environment.Following the education session, attendees were invited to complete an anonymous online surveyassessing their views on the implications of the European Market Infrastructure Regulations (EMIR) fortheir pension funds. The results have now been collated and are shown below.Key findings from the survey include:• A significant majority of respondents think their pension funds are “under prepared” or “not at allprepared” for the implementation of EMIR• All respondents feel it is either “urgent” or “relatively” urgent that they take action to addressissues raised by the implementation of EMIR• Almost all respondents think that the implementation of EMIR will not benefit pension funds froman overall cost perspective• A significant majority of respondents see the requirement to post cash as variation margin forcleared trades as the biggest implication of the new regulations
  2. 2. February 2013 For Institutional Investors 21) Do you think the implementation of EMIR will benefit pensionfunds from a risk reduction perspective?2) Do you think the implementation of EMIR will benefit pensionfunds from an overall cost perspective?37.5%62.5%Yes No11.1%88.9%Yes No
  3. 3. February 2013 For Institutional Investors 33) What do you think is the biggest implication of the regulationsfor pension funds?4) How well prepared is your pension fund for theimplementation of EMIR?0.0%77.8%22.2%0.0%0%10%20%30%40%50%60%70%80%90%Initial margin forcleared tradesCash as variationmargin for clearedtradesBilateral initialmargin for non-cleared tradesThe reportingrequirementInitial margin for cleared tradesCash as variation margin for cleared tradesBilateral initial margin for non-cleared tradesThe reporting requirement0.0%12.5%75.0%12.5%0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%Fully prepared Prepared Under prepared Not at all preparedFully preparedPreparedUnder preparedNot at all prepared
  4. 4. February 2013 For Institutional Investors 45) Will you take advantage of the pension fund exemption or willyou start to clear your OTC derivative transactions ahead of thedeadline?6) How urgent do you feel it is to take action to address theissues raised by the implementation of EMIR?0.0%12.5%87.5%0%10%20%30%40%50%60%70%80%90%100%Use exemption Clear Early Dont knowUse exemptionClear EarlyDont know37.5%62.5%0.0% 0.0% 0.0%0%10%20%30%40%50%60%70%Urgent (wouldlike to addressimmediately)Relatively urgent(will put on thelist for the nextquartersbusiness)Less urgent (willwait until myasset managerraises it)Not urgent at all(will wait until adecision isrequired)Not relevant(does not affectmy scheme)Urgent (would like to address immediately)Relatively urgent (will put on the list for the nextquarters business)
  5. 5. February 2013 For Institutional Investors 57) Do you believe that the use of central counterparties forclearing will reduce risk to pension funds?Further InformationFor more details on the impact of EMIR and how pension funds can prepare, please contacttom.mccartan@redington.co.uk or your usual Redington representative.Disclaimer© Redington Limited 2013. All rights reserved. No reproduction, copy, transmission or translation of this publication may be made without thestatus of Redington Limited as the authors being acknowledged.Registered Office: 13-15 Mallow Street, London EC1Y 8RD. Redington Limited (reg no 6660006) is registered in England and Wales.66.7%33.3%Yes No