The new EMIR II consultation brings, principally, no revelations. Among few exceptions is the fact that the European Commission's working document seeks market participants' views on the appropriateness of the hedging definition as well as on the proper calibration of the clearing thresholds.
These issues may be of major practical importance for non-financial counterparties.
It needs to be born in mind, hedging definition, as designed under EMIR, has been successfully incorporated into MiFID II Directive and MiFIR.
The entire comprehensive system has been designed this way, where hedging transactions, in the EMIR meaning, are excluded from the non-financial counterparties' expositions in such important MiFID II institutions like ancillary activity exemption or position limits.
Hence, modifications as regards the hedging definition in EMIR will possibly in consequence impact on the above MiFID II innovations.
Beyond the scope of the current consultation remains the parallel consultation process carried out by the European financial oversight authority (ESMA) with respect to asset classes subject to the cleaning obligation.
The European Commission's consultation is also without prejudice to earlier consultation run for EMIR reporting scheme purposes.