European Market Infrastructure Regulation

The European Market Infrastructure Regulation (EMIR) is a set of rules designed to improve the safety and transparency of the derivatives markets—financial contracts like swaps used for hedging or speculation. EMIR requires firms to report derivative trades to a central database, ensure that parties have proper risk management practices, and use clearinghouses that act as middlemen to reduce counterparty risk. Its goal is to prevent financial instability by making derivatives trading more transparent, reducing systemic risk, and increasing market confidence across Europe.