In a letter issued to all licence holders, legal advisors, auditors and derivative counterparties, the MFSA has published a list of common issues identified in most of the EMIR on-site inspections being performed by the MFSA. These four issues are:

1. Lack of written proceures. The MFSA has observed that a number of undertaking were unable to provide a set of written procedures which establish the processes being carried out by such undertaking to ensure compliance with EMIR and recommended to all undertaking to put in place such written procedures.

2. Lack of delegating documentation. Whilst acknowledging that n terms of EMIR, it is possible to delegate certain responsibilities, including reporting, to a counterparty or a third party entity, the MFSA expressed its expectation that delegating documentation should be available during on-site inspections.

3. Documentation of Risk Mitigation Techniques. Once again the main issue related to the availability of documentation showing compliance with each undertaking’s risk mitigation techniques obligation. It is observed that in respect of OTC derivatives, this obligation is typically documented through the appropriate ISDA protocols or amending agreements.

4. Build-up for forthcoming clearing obligation. The MFSA brought to the attention of EMIR undertakings that draft Regulatory Technical Standards in relation to clearing where expected shortly and urged undertakings to have in place the necessary set-up to clear through a CCP once the clearing obligation comes into effect.