Emir Qa

EMIR
Questions & Answers
Version: October 2014

Please see page 13 for important information and disclaimers
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FOREWORD
The European Market Infrastructure Regulation, EMIR, is one of the outputs of

the G20 resolutions taken in Pittsburgh in September 2009 regarding the
derivative markets. It intends to increase transparency, reduce operational risk
and minimise counterparty risks through a series of new rules. Societe
Generale Corporate & Investment Banking is at the forefront of the
implementation of these rules.
EMIR brings in major changes to the way the derivative markets operate in
Europe. It therefore significantly impacts banks operating models and, as a
consequence, their Clients, whoever they may be; asset managers, hedge
funds, insurance companies, corporates and other market players. These
changes are already under way. Some have already been adopted, others are
still subject to the adoption and publication of Regulatory Technical Standards
by the European Securities and Markets Authority.
Since the first edition of this guide in December 2013, EMIR implementation has continued, e.g.
regarding the future clearing obligation. To adapt its business model to the new market environment
where the share of cleared OTC derivatives will grow, Societe Generale has acquired the remaining
50% of Newedge it did not own yet. Societe Generale now has a fully integrated global markets offer,
combining the client focus of an agency broker with the strength of a 150 year old financial institution.
Societe Generale Corporate & Investment Banking has developed strong expertise in EMIR. We are
glad to provide you with the following comprehensive guide, organized as a Q&A, on EMIR impacts. It
is intended to assist you with your new regulatory obligations when dealing in derivatives in Europe.
Produced by our range of specialists, it will help you navigate through the new rules, answering the
main questions you may have and supporting you in adapting to this new regulation.
If you need more information, do not hesitate to contact your Sales people who will mobilize our team
of experts.
Together we will succeed in adapting to EMIR and building a more secure environment for derivative
transactions.
Dan Fields
Head of Global Markets
Societe Generale
Corporate & Investment Banking
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CONTENTS
FOREWORD ........................................................................................................................................... 4
INDEX BY KEY TOPICS ......................................................................................................................... 8
DISCLAIMER ........................................................................................................................................ 13
ABOUT THIS DOCUMENT ................................................................................................................... 14
1.
WHAT IS EMIR? SOME GENERAL QUESTIONS ....................................................................... 16

1.1.
1.2.
1.3.
A GENERAL PRESENTATION OF EMIR......................................................................................... 17

THE SCOPE OF EMIR ................................................................................................................ 25
LEGAL DOCUMENTATION............................................................................................................ 29
2. RISK MITIGATION TECHNIQUES (NON-CLEARED TRADES) ..................................................... 32

2.1. CONFIRMATIONS ....................................................................................................................... 33
2.1.1.
Scope .............................................................................................................................. 33
2.1.2.
Societe Generale solutions & actions ......................................................................... 33
2.1.3.
Questions on the nature of confirmations .................................................................. 36
2.2. M ARK-TO-M ARKET (MTM) OBLIGATION ................................................................................. 37
2.3. PORTFOLIO RECONCILIATION AND DISPUTE RESOLUTION ............................................................. 37
2.4. PORTFOLIO COMPRESSION ........................................................................................................ 43
3. REPORTING OBLIGATION.............................................................................................................. 44
3.1.
3.2.
3.3.
3.4.
REPORTING GENERAL PRINCIPLES ............................................................................................. 45

REPORTING OBLIGATION IMPLEMENTATION: ............................................................................... 49
REPORTING DELEGATION SERVICE ............................................................................................. 50
INTERNATIONAL IDENTIFIERS ..................................................................................................... 50
4. CLEARING OBLIGATION ................................................................................................................ 60

4.1.
4.2.
4.3.
4.4.
4.5.
CLEARING OBLIGATION .............................................................................................................. 61

FRONTLOADING......................................................................................................................... 65
INTRAGROUP TRANSACTIONS ..................................................................................................... 65
CLEARING THRESHOLDS FOR NFCS .......................................................................................... 67
COLLATERAL ON CCPS ............................................................................................................. 69
5. COLLATERAL OBLIGATION .......................................................................................................... 73

GLOSSARY .......................................................................................................................................... 78
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INDEX BY KEY TOPICS

BACKLOADING
See Reporting
CLEARING
Clearable derivatives
. Q.75 & 77
Clearing thresholds
Entities impacted by
. Q.74 & 76
Q.87 to 92
Frontloading
Phase-in period
Q.80
Intragroup
Collateral on CCPs
Client clearing offer
Q.74
Q.81 to 86
Q.93 to 100
Q.78 & 79
COLLATERAL
Q.101
Q.101
Acceptable assets
Frequency
Initial & variation margins
Q102
CONFIRMATION
.
Delays
Means available for
Nature of
Scope
Q.19 & 25
Q.20 to 24
Q.26 to 28
Q.19
Timelines
...
Q.19
Tranches
...
Q.27
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..
Types of
Q.20
DOCUMENTATION
FBF, DRV, EFET and other derivative agreements
ISDA Protocols
Q.13
Q.12
Q.14 to 16
ISDA Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol .
Q.12, 32 & 39
ISDA NFC Representation Protocol
Clearing documentation....
Q17
CSA documentation (margin requirements for uncleared trades).
Q18
Consent
Q12 & 47
EMIR
.
Definition of
Impact on entities
Q.1
.. Q.2 to 6
Objectives of
..
Q.1
Registration
Q.8
Scope (asset classes)

Scope (entities)
Timeline
Q.10
Q.2 to 6 & 9
..
Q.7
EXEMPTION
Central Bank, Pension Funds, NFCs
Scope of EMIR
Q.9
FRONTLOADING
See Clearing
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IDENTIFIER
LEI
Q.59 to 64
UPI
Q.73
UTI
Q.50 & 65 to 72
LISTED DERIVATIVES
..
Listed derivatives
Q.10
MATCHING
See Confirmation
MARK-TO-MARKET (MTM)
.
Valuation
Q.29
NON-EEA ENTITIES
See EMIR Scope (entities)
PORTFOLIO COMPRESSION
Definition of
Documentation
..
..
Obligation to perform
Q.41
Q.43
Q.42
PORTFOLIO RECONCILIATION
Contacts at Societe Generale
Disputes
Q.37
Q.31, 39 & 40
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Frequency
Q.36
Data, Key term to

reconcile
Q.35
Obligation to perform
Q.30
Procedures for
Registration of
Q.31 to 34
Societe Generale handling
..
Q.32
Q.36 & 38
REPORTING
See also Identifiers
Backloading
Q.48 & 50
Data
Delegation service
Q.58
Q.44 & 48
Timeline
Q 46, 47 & 55
Trade Repositories
Q.51 to 55
Scope (entities)
Q.45
Valuation & Collateral reporting
Q.49
SOCIETE GENERALE
Classification under EMIR
Delegation service (reporting)
Q.11
Q.58
Q.20
Repository readiness
Q.56 & 57
Portfolio reconciliation
Q.36 38
Newedge/ client clearing
Q.78 & 79
Matching and confirmation tools
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TRADE REPOSITORIES
See also Reporting and Societe Generale
Selection of
..
Q.52
Q.55
Technical aspects
VALUATIONS
See also Mark-to-Market
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DISCLAIMER
Societe Generale Corporate & Investment Banking (SG CIB) is a marketing name for corporate and
investment banking businesses of Societe Generale (SG) and its subsidiaries worldwide. This
document is for informational purposes only and does not constitute an offer, or the solicitation of an
offer, or a recommendation, to buy or sell any securities, futures, derivatives or other financial
instruments, services or products. The information herein has been obtained from sources believed to
be reliable, but neither SG nor any of its affiliates make any representation or warranty as to its
accuracy or completeness. This material is for institutional and corporate clients only. The information
contained herein does not have regard to specific investment, financial situations or the specific needs
of any specific entity or person. Clients should make their own appraisal of the risks and
appropriateness of investing in, or trading the types of products described herein given their own
investment objectives, experience, financial and operational resources and other relevant
circumstances. The information contained herein may not be relied upon as investment, accounting,
legal, regulatory or tax advice or an investment recommendation.
NEWEDGE refers to NEWEDGE Group SA and all of its worldwide branches and subsidiaries.
NEWEDGE Group SA is a wholly owned subsidiary of Societe Generale. NEWEDGE Group SA and
its foreign branches are authorized by the Authorite de Controle Prudential et de Resolution (ACPR)
and Authorite des Marches Financiers (AMF) in France. NEWEDGE UK Financial Limited is
authorized and regulated by the Financial Conduct Authority (FCA) in the U.K. NEWEDGE USA is a
member of FINRA and SIPC (SIPC only pertains to securities-related transactions and positions).
NEWEDGE Canada Inc. is a member of the CIPF. Not all products or services are available from all
NEWEDGE organizations or personnel. NEWEDGE USA, LLC and SG Americas Securities LLC
(SGAS), a wholly owned subsidiary of Societe Generale and a U.S regulated broker dealer, are
separate legal entities and separately registered broker-dealers and FINRA members. NEWEDGE
USA is also registered with the CFTC as a futures commission merchant and swap dealer. Any
NEWEDGE USA prime brokerage and clearing services described herein are offered in the U.S. by
NEWEDGE USA, LLC.
Notice to French clients: This material is issued in France by or through Societe Generale which is
authorized and supervised by the Autorite de Controle Prudentiel et de Rsolution (ACPR) and
regulated by the Autorite des Marches Financiers (AMF).
Notice to UK clients: This document is issued in the U.K. by the London Branch of Societe Generale.
Societe Generale is a French credit institution (bank) authorised by the Autorit de Contrle Prudentiel
et de Rsolution (ACPR,the French Prudential Control and Resolution Authority) and the Prudential
Regulation Authority and subject to limited regulation by the Financial Conduct Authority and
Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the
Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from
us on request.
Notice to US clients: Capital markets and investment banking activities and securities services in the
United States are offered through SG Americas Securities LLC (SGAS), a broker-dealer registered
with the U.S. Securities and Exchange Commission and member of NYSE, FINRA and SIPC. Any US
person wishing to discuss this document or effect transactions in any security discussed herein should
do so with or through SG Americas Securities LLC, 245 Park Avenue, New York, NY 10167 (212) 2786000.
Notice to Canadian clients: This document is for information purposes only and is intended for use by
Permitted Clients, as defined under National Instrument 31-103, Accredited Investors, as defined
under National Instrument 45-106, Accredited Counterparties as defined under the Derivatives Act
(Quebec) and Qualifies Parties as defined under the ASC and BCSC Orders.
Additional information is available upon request. This document may not be reproduced, distributed, or
published by any other person without the prior consent of SG.
2014 Socit Gnrale Group (SG) and its affiliates. All rights reserved.
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ABOUT THIS DOCUMENT

OBJECTIVES:
This document aims to provide standard answers to questions of our clients on EMIR.
It is built in a form of questions and answers. Hence there may be some redundancies in the
content.
The content of some sections is subject to change as some implementing regulations must still
be adopted.
SUPPORTING DOCUMENTATION:
The following websites are excellent sources of information:
European Commission English
European Commission Q&A session 10 July 2014
http://ec.europa.eu/internal_market/financial-markets/docs/derivatives/emir-faqs_en.pdf
ESMA English
EMIR homepage
http://www.esma.europa.eu/page/European-Market-Infrastructure-Regulation-EMIR
Q&A for implementation of EMIR
Latest updated version of the Q&A dated 10 July 2014

http://www.esma.europa.eu/system/files/2014-815.pdf
Q&A for Non-Financial Counterparties & dedicated webpage
http://www.esma.europa.eu/page/Non-Financial-Counterparties-0
Esma public register page
http://www.esma.europa.eu/page/Registries-and-Databases
Autorit des marchs financiers (AMF)

http://www.amf-france.org/en_US/Reglementation/Textes-europeens/Marches/EMIR.html?
Financial Conduct Authority- FCA (former FSA) English
http://www.fca.org.uk/firms/markets/international-markets/emir
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The International Swaps and Derivatives Association (ISDA) English

http://www2.isda.org/
The Association of Corporate Treasurers (UK) English
http://www.treasurers.org/node/9406
You can also refer directly to the regulation and its supporting regulatory technical standards:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:201:0001:0059:EN:PDF
http://www.esma.europa.eu/system/files/2012-600_0.pdf
Should you have further queries, you can contact AMF, ESMA or the European Commission
directly at the following adresses :
AMF : emir@amf-france.org
ESMA : EMIR-questions@esma.europa.eu
European commission : Markt-G2@ec.europa.eu
LEGEND:
Be careful with the answer: the regulatory treatment may not be entirely finalised
FYI
For your information
This question or paragraph is not relevant for non-EEA counterparties
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1. WHAT IS EMIR?
Some General
Questions
1.1. A GENERAL PRESENTATION OF EMIR
1.2. THE SCOPE OF EMIR
1.3. LEGAL DOCUMENTATION
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1.1. A general presentation of EMIR

1. What is EMIR?
Official name: Regulation (EU) No 648/2012 of the European Parliament and of the Council of
4 July 2012 on OTC derivatives, central counterparties and trade repositories.
In the aftermath of the global financial crisis in 2008, the G20 countries committed in Pittsburgh
in 2009 to address the risks related to derivative markets. In fulfilment of this commitment, the
EU adopted in 2012 the European Market Infrastructure Regulation (EMIR), which imposes
central clearing, reporting of standard OTC derivative contracts to Trade Repositories (TR) and
risk mitigation measures, including collateral obligations, for non-cleared trades. The regulation
also sets a framework for the organization and supervision of central clearing counterparties
(CCP). EMIR was adopted on 4 July 2012 and entered into force on 16 August 2012, but its
main obligations are subject to the adoption of Regulatory Technical Standards (RTS), some of
which are yet to be drafted. It is directly applicable in all the EU Member States.
EMIR has 3 main objectives:
Mitigate counterparty risks and reduce systemic exposure to derivatives;
Reduce operational risks;
Increase market transparency.
EMIR is the European equivalent of the Dodd-Frank Act (except for business conduct and
execution rules).The main obligations under EMIR are:
-
Clearing of standard OTC derivatives;

Risk mitigation techniques for non-centrally cleared OTC derivatives;
Special collateral requirements for non centrally cleared OTC derivatives;
Reporting of OTC and listed derivatives to trade repositories.
Depending on your legal status, you may be subject to none, one, several or all of the above
obligations.
EMIR categorises counterparties to OTC derivative transactions as either "financial
counterparties" (FC) or as "non-financial counterparties" (NFC). The distinction is relevant
among others in relation to the obligation to clear derivatives through an authorized or
recognised central counterparty (CCP) set out per Article 4 of EMIR (the clearing obligation)
and the risk-mitigation techniques for OTC derivative contracts not cleared by a CCP set out
per Article 11 of EMIR.
EMIR also sets a number of exemptions to certain EMIR requirements for some entities.
FYI : Exemptions are presented in question 9
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The mandatory obligations:

Technique
Counterparties
When does it begin?
Timely confirmations*
FC, NFC-, NFC+
15 March 2013
Daily mark to market valuation
FC and NFC+
15 March 2013
Portfolio reconciliation*
FC, NFC-, NFC+
15 September 2013
Portfolio compression*
FC, NFC-, NFC+
15 September 2013
Dispute resolution*
FC, NFC-, NFC+
15 September 2013
FC,NFC-,NFC+
12 February 2014
FC, NFC+
12 August 2014
Reporting
Collateral and Valuation
Reporting
June 2015 at the earliest

for clearing members
counterparties;
Clearing
FC, NFC+
February 2016 or June

2016 for other financial
counterparties and some
AIFs (based on their
category);
February 2018 for NFC+
Initial variation and margin

requirements
Apply to contracts where

both parties are FC or
NFC+. If current ESMA
proposal does not
change, some third
country NFC- may
however fall in the scope
(this is challenged by the
industry)
Rules to be aligned with

final rules from BCBS and
IOSCO published in
September 2013. Draft
rules published in 2014.
Final RTS expected by
end 2014, for entry into
force in December 2015
Capital against uncollateralised

risk
FC
In force (Art. 11.4 EMIR).
* Stricter rules apply to FC and NFC+

FC: Financial Counterparties
NFC+: Non Financial Counterparties above any of the clearing thresholds
NFC-: Non Financial Counterparties under all the clearing thresholds
FYI : thresholds are presented in paragraph 4.4 or questions 87 to 92
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2. Which are the entities impacted by EMIR?

1
All entities from the European Economic Area (EEA) (see details of EMIR application in the EEA in
the Glossary under EEA), with the exception of individuals trading OTC derivatives for private
purposes, are impacted by EMIR. This also includes the branches of EEA entities located outside of
the EEA.
In addition, any non-EEA entity trading with an EEA entity or its branches will be impacted by EMIR.
Non-EEA subsidiaries of EEA entities can fall into EMIR scope if some conditions are fulfilled. For
example, a non-European subsidiary of a European financial entity could be subject to EMIR if it
benefits from a guarantee from its European parent company.
DEFINITION OF AN ENTITY
EMIR applies to a wide range of firms and it categorises such firms as follows:
-
A financial counterparty (FC), which is an investment firm, credit institution(bank), insurer,

reinsurer, registered UCITS fund, pension fund or an alternative investment fund managed by
an alternative investment manager (as defined by the applicable EU legislation authorizing or
regulating those entities).
A non-financial counterparty (NFC), which is an entity established in the EEA, other than a
FC, that is party to a derivative.
Non-EEA entities should consider the business activities covered by each of the definitions
above when categorising themselves for the purpose of EMIR.
EMIR treats NFCs differently depending on whether their positions with respect to OTC derivatives
(other than those relating to hedging) exceed or fall below certain clearing thresholds.
-
An NFC that exceeds one of the clearing thresholds (on average for more than 30 days) is
treated the same as an FC under EMIR. We refer to this type of entity as an NFC+.
An NFC that does not exceed any of the clearing thresholds is subject to more lenient
treatment than an NFC+ or FC. We refer to this type of entity as an NFC-.
Refer to Q. 87 for the details on the Clearing thresholds for NFCs.

The European Economic Area comprises the 28 Member States of the European Union, plus Iceland,
Norway and Liechtenstein. Refer to EEA entry in the Glossary for a detailed list.
We are referring to EEA (the 28 EU Member States + Norway, Iceland, and Lichtenstein) as notwithstanding the fact that
Norway, Iceland and Lichtenstein have not yet adopted EMIR, this should in principle be the case in a relatively short period of
time.
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3. How does EMIR apply to funds?

Funds are directly impacted by EMIR if they are established within the EEA or established outside of
2
the EEA but regulated under AIFMD (Alternative Investment Fund Managers Directive) . However,
funds established outside of the EEA and not directly subject to EMIR may be indirectly impacted
when dealing with EEA entities.
Funds regulated under UCITS or AIFM Directives that are established in the EEA are classified as
financial counterparties under EMIR while other EEA funds (e.g. securitization schemes, dedicated
funds)should be regarded as non financial counterparties (unless they fit into another financial
counterparties category : eg pension funds).
In the cases where EMIR is not directly applicable, the equivalence regime should be investigated on a
case by case basis if the fund is dealing with an EEA entity subject to EMIR. As a general rule, funds
that do not enter into the AIFMD fund definition (e.g. dedicated funds, securitization funds) would be
considered as non financial counterparty equivalent while other funds would be considered as
financial counterparty equivalent.
It is reminded that these are just general guidelines and that each counterparty should determine its
own status under EMIR or any applicable regulation pertaining to funds.
4. How does EMIR impact a firm ?

It is possible to identify 3 broad strands of EMIR s impact:
-
Legal impact: being categorised under EMIR as a non financial counterparty or a financial
counterparty creates a certain number of obligations. Moreover, OTC derivative contracts may
have to be (re)documented;
Operational impact: risk mitigation measures must be carried out and trades must be
reported;
Financial impact: clearing becomes mandatory for certain asset classes, certain counterparty
types or over a certain clearing threshold, and collateral must be exchanged for non-cleared
trades.
Non-EEA entities will only be subject to EMIR when they enter into transactions with an EEA entity or
its branches.
FYI : From 10 October 20143, Non-EU entities where at least one of them is guaranteed by a financial
counterparty established in the EU with a total gross notional amount of OTC derivatives of EUR 8bn
or more and amouting to 5% or more of the total gross notional of their guarantor may also be subject
to EMIR clearing and risk mitigation obligations.
Two EU branches of non-EU financial counterparties may be subject to clearing and risk mitigation
obligations when these two non-EU financial counterparties enter into an OTC derivative contract
through their EU branch.
If you are a Financial Counterparty (FC) or NFC + : you are subject to all obligations
2
3
Non EEA AIF can be subject to EMIR if its asset manager is established within the EEA and regulated as an AIFM.
Anti-evasion rules apply from 10 April 2014 (entry into force of the RTS)
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Type of entity
Obligations
Risk mitigation techniques, including daily MTM valuation
Reporting obligation
FC
Clearing obligation
Collateral management
If you are a Non-Financial Counterparty (NFC), your obligations under EMIR will depend on
whether or not your non hedging OTC derivative positions in designated categories of transaction
exceed a limit referred to as the "clearing threshold", defined in the ESMA Technical Standards on
the basis of your rolling average position over 30 working days.
FYI : thresholds are presented in paragraph 4.4 or questions 87 to 92

1. Risk Mitigation Techniques
These measures applies to all EEA counterparties even if the trade is concluded with non-EEA
counterparties, and to non-EEA entities for trades conducted with an EEA counterparty.
These techniques include :
-
The timely confirmation of the terms of the OTC derivative contract;

Portfolio reconciliation and compression techniques;
Dispute resolution mechanisms.
MTM
The timely confirmation was the first provision of EMIR to come into force, on 15 March 2013.
As of today, these time-limits have been reduced to D+1 for FC and NFC+ and D+2 for NFC-.
The other obligations, namely portfolio reconciliation, portfolio compression and dispute resolution
became effective on 15 September 2013.
Who
EMIR Status
Products
Timeline
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FC, NFC+
(All obligations)
Both
counterparties
FC, NFC+ and NFC(timely confirmation,

portfolio reconciliation
and compression,
dispute resolution)
Non cleared OTC

derivatives
15 March 2013 for timely

confirmation & daily MTM
calculation
15 September 2013 for
Portfolio reconciliation,
portfolio compression and
dispute resolution
2. The Reporting Obligation

This obligation applies to all EEA entities active in OTC and listed derivatives markets. Under
EMIR, the two counterparties to a trade must submit a report to a Trade Repository authorised by
ESMA. Reporting started on 12 February 2014 for all asset classes.
In case of a transaction between an EEA counterparty and a non-EEA counterparty, only the EEA
counterparty is obliged to report the transaction. All EEA entities must report their entire portfolio
including trades with non-EEA counterparties and private individuals.
Societe Generale has chosen DTCC Derivatives Repository Ltd. (DDRL) as its trade repository.
SG has developed a reporting delegation service for counterparties who trade with us transactions
covered by EMIR and which are subject to the reporting obligation (does not apply to non-EEA
entities).
Who
Both counterparties (if both
are EEA entities*) have to
report trade information
Both counterparties (if both
are EEA entities*) have to
report Collateral & valuation
EMIR Status
Products
Timeline
FC, NFC+ and

NFC-
All OTC and listed

derivatives
12 February 2014
FC, NFC+
All OTC and listed

derivatives
12 August 2014
*Only EEA counterparty shall report if the other is a non-EEA entity

3. The Clearing Obligation
This obligation shall apply to all FC and NFC+ counterparties (after the 3 year phase-in period)
entering into an OTC derivative contract that has been declared eligible to central clearing by
ESMA, excluding transactions carried out by NFCs below the clearing thresholds, by certain public
bodies or entities within the EU, or transactions qualifying as intragroup transactions and pension
funds for a period of 3 years.
The clearing obligation shall also apply to non-EEA counterparties where they trade with an EEA
entity, if they would be a FC or NFC+ equivalent based on their business activities and size of their
derivative portfolio.
Who
Both
counterparties
EMIR Status
Products
Timeline
FC
OTC derivatives
deemed clearable by
CCP and deemed
eligible by ESMA
From June 2015 (for CCP

Clearing Members) to
February or June 2016 (for
non-clearing members) and
to February2018 for NFC+
Page 22 / 82
Both
counterparties
NFC+
OTC derivatives
deemed eligible by
ESMA or clearable by
CCP
After a phase-in period of 3

years* after entry into force
of the RTS
* This phase-in period is the result of a political agreement between the European Commission
and the European Parliament in February 2013. A period of 3 years is proposed by ESMA. That
should bring the clearing obligation for a majority of NFC+ to end 2017 or early 2018
For more details please refer to our clearing section inchapter 4
4. Collateral Management
EU rules on collateral management have been subject to consultation of the industry and have yet
to be adopted. Collateral management requirements are expected to come into force between
2015 and 2019 (in line with IOSCO guidelines).
Who
EMIR Status
Products
Timeline
Both
counterparties
FC, NFC+
Non cleared OTC

derivatives
2015 2019
The term "financial counterparty" comprises investment firms authorised under MiFID;
authorised credit institutions; authorised insurance, assurance and reinsurance undertakings;
UCITs funds and their related management companies; institutions for occupation retirement
provision and alternative investment funds managed by investment managers authorised or
registered under AIFMD (all as defined in the relevant European directives).
The term "non-financial counterparty" comprises any undertaking that is not a Financial
Counterparty (excluding individuals trading derivatives for their own private purposes)
5. What are the impacts of EMIR on non-EEA branches of an EEA entity?

Non-EEA branches of an EEA entity are subject to EMIR, since they are considered EEA entities.
However, local regulations on data privacy and banking secrecy may have an impact on the
implementation of some EMIR requirements in certain jurisdictions.
6. What are the impacts of EMIR on non-EEA entities?

Non-EEA counterparties: Any non-EEA customers dealing with an EEA counterparty (and their
branches outside of EEA, i.e. SG NY Branch) will be indirectly impacted by the EMIR Regulation.
For FC/NFC+ clients : The most important obligation will be Mandatory Clearing. At this stage,
final rules on clearing have not been published yet by the regulator. If the product is deemed
mandatory clearable, Societe Generale will not be authorised to trade it bilaterally or on a nonauthorised CCP. Mandatory clearing implementation is expected to start mid-2015 for major
clearing member financial institutions.
For all clients, Societe Generale has had to comply with Timely Confirmations since March 2013
and has had to meet the Portfolio Reconciliation obligation, since 15 September 2013. So
indirectly, non-EEA counterparties are impacted by our new confirmation and reconciliation
processes. On these two points, DFA and EMIR obligations are quite similar and this is reflected
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internally, as we will have one unique process for both regulations. Further equivalences are
expected to be agreed by the European Commission with other jurisdictions.
Thirdly, the Reporting obligation does not apply to our non-EEA clients but Societe Generale
reports our trades with non-EEA counterparties to a central Trade Repository, named DDRL
(since 12 February 2014). This may lead to confidentiality issues most of which should be
resolved with our clients consent.
Finally, Collateral Management rules (Initial & variation margins) have yet to be adopted by the EU
and shall not apply before the end of 2015.
Given certain extraterritorial provisions championed by regulators on both sides of the Atlantic, crossborder discussions are currently in progress between CFTC and ESMA and will hopefully bring more
clarity on DFA versus EMIR compliance.
Negotiations are being held between European Regulators and a number of non-EEA Regulators in
order to conclude equivalence and mutual recognition agreements, which should over time reduce
duplication and conflicts of rules.
N.B : certain deals fall simultaneously under the jurisdiction of ESMA and Member States Domestic
Regulators (for EMIR) and of the CFTC, the SEC (e.g. Title VII of the Dodd-Frank Act) or even other
jurisdictions (e.g. in Asia).
7. What is the EMIR timeline?
8. Is there any registration required and if so, when will it take place?
Unlike the Dodd-Frank regulation, no registration of counterparties is required (except for
intermediaries such as CCPs and trade repositories which need to be recognised by ESMA).
Page 24 / 82
NOTIFICATION TO ESMA
EEA Non-Financial Counterparties (NFC) have to notify ESMA and their national
competent authority if they are NFC+ (i.e. above one of the clearing thresholds).
You will find more information in the Note Notification from non-financial counterparty to
ESMA of exceeding the clearing threshold published on ESMAs website:
http://www.esma.europa.eu/page/European-Market-Infrastructure-Regulation-EMIR
Your national regulators website might provide templates for such notifications.
NOTIFICATION OF COUNTERPARTY STATUS TO SOCIETE GENERALE
In order to ensure the correct application of the rules, Societe Generale will request clients
representation regarding its EMIR status, either by protocol or by returning the information
on an ad hoc basis.
If you are non-EEA based and are a derivative counterparty to Societe Generale, we will
contact you to collect your status.
ABOUT CENTRAL COUNTERPARTIES (CCPs) AND TRADE REPOSITORIES (TRs)
In order to be compliant with the clearing and reporting obligations under EMIR, you
should make sure that the CCPs and TRs you selected are respectively authorised by and
registered with ESMA.
1.2. The scope of EMIR

9. Which entities are exempted under EMIR?
Preliminary remark : The exemptions apply only to entities from EEA countries or from countries
which were recognized as equivalent by the Commission.
EMIR defines a list of exempted entities from some obligations:

Out of scope: the European Central Bank, national central banks of EU Member States, the
Bank of International Settlements, public bodies of EU Member States in charge of the
management of the public debt.
Partial exemption (not from reporting) (see table below): multilateral development banks,
public sector entities owned by central governments and which benefit from explicit
guarantee arrangements by the central governments, the European Financial Stability
Facility, the European Stability Mechanism.
Temporary exemption for clearing: EU Pension funds for 3 years (renewable twice, one by
2 years , and one by 1 year) and for the clearing obligation only.
Under conditions for clearing and collateral :
o Intragroup transactions ( between fully consolidated entities)
o For NFC : below all asset classes clearing thresholds for non-hedging trades
(hedging trades do not enter into the calculation of the thresholds)
o For NFC+ : 3 years phase-in period for clearing from the entry into force of
RTS.
Page 25 / 82
FULL EXEMPTION FROM EMIR (1)

ie to Clearing/Collateral & Reporting Obligations
PARTIAL EXEMPTION
TEMPORARY
EXEMPTION
CORPORATES
Intragroups
LEGAL EXEMPTION TYPES

EXEMPTIONS UNDER CONDITIONS (2)
Clearing
obligation
Collateral
obligation
Risk
mitigation
techniques O.
Reporting
Obligation
European System of
Central Banks (ESCB)
Members
NO
NO
NO
NO
Other member states'

bodies performing similar
functions
NO
NO
NO
NO
Other union public bodies

charged with or intervening
in the management of
public debt
NO
NO
NO
NO
The Bank for International

Settlements (BIS)
NO
NO
NO
NO
Multilateral development
banks
NO
NO
NO
YES
Public sector entities where

they are owned by central
governments that have
explicit guarantee
arrangements provided by
central governments
NO
NO
NO
YES
The European Financial

Stability Facility (EFSF) and
the European Stability
Mechanism
NO
NO
NO
YES
Institution for occupational

retirement provisions
registered in accordance
with Directive 2003/41/EC
NO
YES
YES
YES
WITH hedging positions

only (= NFC-)
NO
NO
YES with softer

requirements
(except for the
MtM)
YES
below the threshold (=

NFC-)
NO
NO
YES with softer

requirements
(except for the
MtM)
YES
Above the threshold (=

NFC+)
YES
YES
YES
Financials
YES
NO
NO
(sometimes only
partial exemption)
and under different
conditions
than
those of clearing
YES
Intragroups being two

entities fully consolidated
under IFRS rules
like
YES
(1) The Commission shall be empowered to adopt delegated acts in accordance with Article 82 of EMIR to amend the list set out in
paragraph 4 of this Article
(2) Counterparties from third countries subject to equivalent regulation. (art.13.3 EMIR level 1)
FYI
For non-EEA entities the exemption can be applied only if the country has an
equivalence granted by the European Commission
Page 26 / 82
10. Which asset classes are covered by EMIR?

EMIR applies to all derivatives identified in Annex 1 Section C (4) to (10) of The Markets in Financial
Instruments Directive (MiFID). This is an extensive list that includes options, futures, swaps, forward
rate contracts and any other derivatives related to:
Securities, currencies, interest rates/yields, other derivatives, financial indices or financial

measures which may be settled physically or in cash;
Commodities that must be settled in cash or may be settled in cash at the option of one of
the parties;
Commodities that can be physically settled provided that they are traded on a regulated
market and/or an MTF;
Commodities that can be physically settled, not mentioned in MiFID Section C(6), not being
for commercial purposes, which have characteristics of other derivatives;
Instruments for the transfer of credit risk;
Financial contract for differences related to MiFID instruments, currencies, interest rates or
other financial indices;
Options, futures, swaps, forward rate contracts and any other derivatives related to climatic
variables, freight rates, emission allowances or inflation rates or other official economic
statistics (cash settlement option) and assets, rights, obligations, indices and measures not
otherwise mentioned.
Therefore spot FX are excluded from the scope of EMIR. Moreover, Societe Generale considers FX
Forward J-2 and FX overnight products to be exempted from the EMIR regulation as well as they are
considered as FX spot transactions from a regulatory point of view.
That being said, since MIFID is a directive,there may be national divergences on the definition and
scope of some products : that is the case for instance of FX forwards.
While some regulators consider that beyond D+2 settlement date, an FX product is no longer a spot
but a forward, other regulators have adopted a broader definition of what constitutes a spot. ESMA is
expected to consult the industry on draft clarification guidelines in September 2014.
There is also some debate on physical delivery commodity forwards.negotiated outside of an MTF.
ESMA is also expected to consult the industry on draft clarification guidelines on this subject.
In the meantime, Societe Generale has chosen a cautious approach and has therefore decided to
include those products in the scope (notably for reporting and portfolio reconciliation) until ESMA
provide due clarification.
ESMA and the European Commission will determine which asset classes will be subject to mandatory
clearing, following a prior authorisation from a national competent authority to clear certain asset
classes. When a national competent authority notifies ESMA that a CCP is authorised to clear a
certain asset class, ESMA will have up to 6 months to decide whether this asset class (or sub-asset
class) will be subject to mandatory clearing as well as the timing of implementation of the clearing
obligation. ESMA may also determine further asset classes which should be subject to the clearing
obligation but for which no CCP has yet been authorised.
N.B: The scope of products eligible for the clearing obligation is still under discussion and will be
known only upon specific RTS (draft RTS on IRS and CDS clearing are currently subject to
consultation). This scope of products must be part of the CCP product scope.
Page 27 / 82
DFA
Asset Class
Equity (6)
OTC Derivatives
Rates
Credit Derivatives
FX
Other
Listed
Derivatives
Other
4)
5)
6)
EMIR
CFTC(6)
Options
Forwards
Contracts for difference
All
Index
Single Name
NDF
(1)
SEC(6)
Swaps
Forwards
Commodity derivatives
1)
2)
3)
Product
(3)
(4)
(3)
Options
Swaps
Agro
Metals
Energy
Physical settlements
Equity
Hybrids
Futures & Options
Y
(2)
Y
Rates
Futures & Options
FX
Futures & Options
Commodities
Futures & Options
EMTN, ETN, ETF, funds
Out of Scope
Warrants, certificates
Y
N
(4)
(5)
N
N
Y
N
Y
N
Out of Scope
Securities , bonds & repos
Out of Scope
Spot trades
Out of Scope
(2)
(2)
(2)
Specific treatment by FCA for FX Forwards dealt for commercial purposes.

Only reporting obligations apply.
Equity Options are generally out of scope for DFA, except when used to approximate Delta One exposures, in which case they may be
covered.
FX Forwards and FX Swaps are exempt under DFA only from execution and clearing requirements.
Physically settled commodity Forwards are exempted from DFA under very specific circumstances based on asset class and
counterparty. Case-by-case evaluation is required.
For DFA, Equity, Credit and certain Hybrid OTC Derivatives are subject to trade-by-trade determination of CFTC vs SEC jurisdiction
DIFFERENCES BETWEEN EMIR AND THE DODD-FRANK ACT

There are significant similarities between EMIR and the Dodd-Frank Act in relation to
the regulation of OTC derivatives markets, but there are also some significant
differences.
FYI
Dodd-Frank applies to swaps and security-based swaps, which broadly include

options, contingent forwards, and exchanges linked to economic interests of any kind;
but exclude (under the current Treasury proposal) physically settled foreign exchange
swaps and forwards (although reporting and business conduct standards still apply to
FX swaps and forwards); spot FX; and physically settled commodity or security
forwards. Only the spot FX exemption exists under EMIR.
Page 28 / 82
11. What is the classification of Societe Generale S.A. under EMIR?

Societe Generale S.A. (including all its branches) is a financial counterparty under Article 2(8) of
EMIR.
For US persons, Societe Generale S.A. is also a Swap Dealer for purposes of DFA, and therefore
Societe Generale S.A. needs to comply with both regulations.
1.3. Legal documentation

12. What is the impact of EMIR on ISDA Master Agreements
A certain number of clauses are to be inserted into ISDA Master Agreements: this can be done
through adherence to various ISDA Protocols.
The first protocol deals with NFC representations.
Another protocol dedicated to portfolio reconciliation, dispute resolution and disclosure of counterparty
data for reporting purposes has been published.
For US entities having already adhered to the ISDA DF2 protocol, they can adhere to the DF2 to
EMIR Top Up Agreement, which bridges between the DF and EMIR Protocols.
There is a third Protocol, the Reporting Protocol, by which counterparties can express their consent to
the use of their data in the fulfilment by their counterparties of their reporting obligations under DFA,
EMIR and any other OTC regulation imposing reporting obligations.
Societe Generale SA has adhered to the three Protocols. We strongly encourage you to adhere in
order to avoid both of us having to enter into burdensome contractual re-documentation work. The
ISDA protocols except the NFC Representation Protocol are open to non ISDA members and to
those who did not enter into an ISDA agreement but into another derivatives agreement.
For new clients, an SG Schedule will integrate the necessary clauses to be inserted in the contractual
documentation.
You can find more information on the ISDA website

http://www2.isda.org/functional-areas/protocol-management/protocol/11
ISDA now uses protocols for amendments to the master agreement
http://www2.isda.org/functional-areas/protocol-management/about-isda-protocols/
List of the available protocols
http://www2.isda.org/functional-areas/protocol-management/open-protocols/
Further ISDA protocols may be published.
Page 29 / 82
13. What is the impact of EMIR on other Master Agreements (FBF, DRV, EFET and
other derivative agreements)?
FBF (FRENCH MASTER AGREEMENT)
A 2013 version of the FBF Master Agreement was adopted to include, among others, certain EMIR
clauses. An EMIR Addendum was also adopted for the AFB 1994, the FBF 2001 and FBF 2007.
These contractual documents will be proposed for signature to our counterparties.
A Technical Addendum (Additif Technique) on portfolio reconciliation and compression and dispute
resolution was also adopted by FBF. It is automatically integrated in the FBF without any signature
required. These documents are published on the FBF website (see link hereunder).
http://www.fbf.fr/fr/contexte-reglementaire-et-juridique/codes-et-conventions/_84WC8P&Count=8
OTHER DERIVATIVE MASTER AGREEMENTS
There are other Derivative Master Agreements such as the EFET (European Federation of Energy
Traders) Agreement, the Deutsche Rahmenvertrag (DRV), etc. some of which have already been
amended to include EMIR clauses.
14. What is the ISDA NFC Representation Protocol?

The International Swaps and Derivatives Association (ISDA) has published the EMIR Non-Financial
Counterparty Representation Protocol, which parties may adhere to in order to give certain
representations as to their status as non-financial counterparties (NFC) or NFC+.
The Protocol is voluntary. In order to adhere, a party must submit an adherence letter to ISDA and pay
a fee of USD 500. ISDA will send the adhering party an email confirmation when it has accepted the
adherence letter. In the adherence letter, the party must specify one of three options:
-
it can adhere as a party making the NFC Representation (for which see below);
it can adhere as a NFC+ Party making the NFC Representation;
it can adhere to the Protocol as a party that does not make the NFC Representation (that is,
as an FC).
15. What is Societe Generales position regarding the ISDA NFC Representation
Protocol?
Societe Generale needs to know its clients status in order to apply the correct risk mitigation
provisions (timely confirmations, portfolio reconciliation). The risk mitigation provisions are stricter for
NFC+ than NFC-. Once clearing becomes mandatory from mid-2015 it will not be possible to
trade without knowing the status of our counterparties.
This is why Societe Generale has adhered to this protocol and encourages its clients to do the same.
Page 30 / 82
16. Does the misrepresentation or misleading notification by a counterparty of its

EMIR classification represent a Termination Event, Additional Termination
Event, Event of Default or equivalent under ISDA?
A misrepresentation by a counterparty of its EMIR classification cannot be construed as a Termination
Event under the general ISDA. However, this issue is addressed in the ISDA NFC Protocol. In case of
a misrepresentation, the Protocol requires the Parties to first negotiate in good faith and then, should
the negotiations fail, the affected party may terminate the transaction (not the entire ISDA) and the
misrepresenting counterparty will have to pay the replacement costs.
17. Which clearing documentation will have to be signed ?

Clearing is offered for certain products (some IRS, and later CDS and FX) by Societe Generale
through its fully owned subsidiary Newedge. As executing broker, Societe Generale and its
counterparty will enter into a Cleared Derivatives Execution Agreement (CDEA) whilst Newedge will
conclude a clearing contract with the same counterparty electing Newedge for clearing.
Standard clearing documentation was published:

- For executing brokers and their counterparties, the LCH Execution Standard Terms for Client
Clearing and the ISDA/FIA Europe Cleared Derivatives Execution Agreement;
- For clearing brokers and their counterparties, the ISDA/FOA Client Cleared OTC Derivatives
Addendum.
18. Will margin requirements for non cleared trades have to be documented?
Yes, CSAs, ARGs and other collateral arrangements will most likely have to be re-documented in
order to align with the EMIR obligations on initial and variation margins.
New standard contracts are expected to be drafted by industry associations (e.g. ISDA, FBF).
Page 31 / 82
2. RISK MITIGATION
TECHNIQUES (noncleared trades)
2.1. CONFIRMATIONS
2.2. MTM OBLIGATION
2.3. PORTFOLIO RECONCILIATION AND DISPUTE RESOLUTION
2.4. PORTFOLIO COMPRESSION
Page 32 / 82
2.1.
Confirmations
2.1.1. Scope
19. What is the scope of the timely confirmation obligation under EMIR?
All non-cleared OTC derivatives are subject to the confirmation obligation.
The timeframe for confirmations is function of the counterparty type, and of the asset class involved.
The time-limits for confirmations have become progressively shorter over time.
2.1.2. Societe Generale solutions & actions
20. Which electronic platforms are available for confirmation and matching? Are
these matching procedures sufficient from a regulatory standpoint?
FYI
For questions relating to Bloomberg and other platforms not available at SG, see Q.21
Whenever possible, Societe Generale encourages the use of electronic means of confirmation.
We also propose our internal solution, e-confirmation, which allows the recovery of the
confirmation and its validation directly on the dedicated website. For non-electronic
confirmations, fax or email will be used.
Societe Generale is currently using many electronic platforms, which span the entire product
range, such as : CLS, DS Match, e-confirmation, EFETnet, FXall, GTSS, ICE, MarkitWire,
Misys, SNA and SWIFT. All these platforms are used in a straight through fashion (i.e., no
manual upload or affirmation required by Middle Office teams).
Page 33 / 82
FX
IRD
Cash*
CDS
Equity
Commodity
Website
Options**
http://www.clsgroup.com/Pages/default.aspx
CLS
DS Match
http://www.dtcc.com/product
s/derivserv/ms/matchconfirm.php
econfirmati
on
https://econf.sgcib.com/Econ
f/
EFETnet
http://www.efetnet.org/
FXALL
http://www.fxall.com/
GTSS
ICE
https://www.theice.com/hom
epage.jhtml
MarkitWire
http://www.markitserv.com/m
s-en/
Misys
http://www.misys.com/
SNA
http://www.swift.com/index.p
age?lang=en
SWIFT
From
november
From
november
http://www.swift.com/index.p
age?lang=en
* FX Cash includes spots, forwards, swaps and NDFs (spot transactions and the spot leg of
swaps being out of scope).
** FX Options includes all options on foreign exchange (vanilla options, exotics and NDO).
Decommissioning will start by the end of 2014. No new clients onboarding.
If none of the external platforms listed above are acceptable to you, Societe Generale also
suggests using eConf, our in-house electronic solution for confirmation. e-confirmation sends
confirmations via an electronic platform but the pairing/matching process remains manual. You
can find more information about e-confirmation on our dedicated website:
https://econf.sgcib.com/Econf/
Page 34 / 82
21. Is Societe Generale willing to send confirmations over Bloomberg (or any other
platform)? If not, what would be the alternative confirmation method?
Societe Generale does not use the Bloomberg confirmation service.
Societe Generale suggests you check if you are already using another EMIR eligible matching
platform such as CLS, FXall, GTSS or MarkitWire in which case we strongly advise you to use them.
If this approach is not acceptable to you, Societe Generale also suggests using e-Confirmation, an
in-house product. eConfirmation sends confirmations via an electronic platform but the
pairing/matching process remains manual.
22. How should confirmations on base metal transactions (SWIFT MT 600) be

processed?
th
Since June 14 2014, transactions on base metals can be confirmed through the SWIFT electronic
platform.
23. How should confirmations on Forward Start Deals be processed? Should the
Trade Date OR the Forward Date be chosen as the confirmation date?
EMIR confirmation deadlines are triggered on trade date, including for forward start deals.
If the deal characteristics (e.g. initial and closing price, date, etc.) have been clearly stated by trade
date, confirmations are processed in the same way as for any other deal.
On the other hand, if some elements remain unidentified on trade date, precisions must be given
within the confirmation, such as the date, the time and the way these characteristics will be
determined (e.g. by whom, on what basis, etc.). When these elements have been determined, a new
confirmation should be sent on forward date to cancel and replace former confirmation.
24. If the proposed confirmation deadlines in the Regulatory Technical Standards

are exceeded, who (Non-Financial Counterparty and/or Financial Counterparty)
must inform whom and when?
Our understanding is that both parties must monitor the timing of confirmations this topic has also
been discussed at industry level in order to agree on an industry-wide solution.
Societe Generale has been working on its processes to become fully compliant with the confirmation
requirements. This includes without being limited to chasing and escalation processes. Through
these new procedures, we should be able to detect delays and will inform you about these. Because
both parties must monitor the timing of confirmations, you should also inform us of any breach of
deadlines that you detect.
FYI
Financial counterparties have to report on a monthly basis to the competent authority

the number of unconfirmed OTC derivative transactions that have been outstanding for
more than 5 business days. This report cannot be sent to the client and will be
aggregated by ESMA along specific categories. It will thus be on an anonymous basis.
Page 35 / 82
25. To whom must FCs report late confirmations?

Late confirmations are deals that have still not been confirmed 5 days after the regulatory deadline.
They are reported to the national competent authority of the entity (for SG, the AMF in France) on a
template defined by the Regulator.
For non-EEA entities, there is no obligation to report these details under EMIR, however there may be
an obligation to report these details under your local regulations.
2.1.3. Questions on the nature of confirmations
26. Will it be possible to use our Term Sheet as a confirmation, mentioning Preconfirmation as a title for instance?
It is not possible to use a Term Sheet as a confirmation under EMIR.
27. We currently work by tranches: should each deal tranche be subject to an

individual confirmation?
All trades must be individually confirmed.
28. What would be considered a confirmation for each asset class (e.g. is it
possible to leverage on pre-confirmations for any asset class)?
In addition to the ESMA definition of what constitutes a confirmation, we consider the current efficient
practice of exchange of confirmations as deemed compliant (notably for inter-banks transactions on
interest rate derivatives) where both parties ensure that the economic terms are the same.
We also consider that a confirmation would meet the definition under the Regulatory Technical
Standards (RTS) where the confirmation is delivered through an internet site operated by one of the
counterparties.
Negative or passive affirmation may constitute a confirmation where combined with an agreement
between the parties providing for confirmations to be issued in this way (e.g. a Master Confirmation
Agreement), and within the timeframe prescribed by the RTS (Under this arrangement, a counterparty
(normally the bank) typically issues a confirmation to the other party and the recipient will be bound by
the terms of the confirmation unless it objects before a specified deadline.) This should only be
adopted in exceptional cases.
We do not consider pre-confirmations as confirmations but do refer to them in the confirmation
documents.
Page 36 / 82
2.2.
Mark-to-Market (MTM) Obligation
29. Who is subject to daily Mark-to-Market valuation obligation?

Only FC and NFC+ have an obligation of daily mark-to-market valuation.
If conditions prevent it, the counterparty should have a mark-to-model valuation instead.
2.3.
Portfolio reconciliation and dispute resolution
30. Do we have to perform portfolio reconciliation and when does this obligation
start?
Yes unless the counterparty is expressly exempted. All EEA counterparties have this obligation but
subject to different frequencies pursuant to the type of counterparty (FC, NFC+ or NFC-).
Non-EEA counterparties are requested to comply with portfolio reconciliation for transactions entered
into with EEA counterparties. This obligation has been effective since 15 September 2013.
Warning: Some EU regulators may prevent the client from trading when portfolio reconciliation is not
agreed between counterparties.
Please refer to Q.31 to 40 for further details.
Page 37 / 82
31. What do firms have to do in order to be compliant with the portfolio

reconciliation obligations?
The portfolio reconciliation process follows 3 steps:
A preliminary written agreement between both counterparties on the method of

reconciliation (one-way delivery or exchange of portfolio data) and on the date of
reconciliation.
FYI: Societe Generale has been contacting each of its clients to agree the reconciliation method
and date. Societe Generale asks them to complete a short form stating these terms if they have
not adhered to the ISDA Protocol
The reconciliation itself by choosing one of two authorised methods :
Societe Generale elected to be Sender of data and allows its counterparties to chosed whatever
solution suits them best.
1. Exchange of portfolio data (in this case, you are deemed to be a Sender): thus both
counterparties are sender and both are responsible for performing the reconciliation and
analysing the reconciliation results.
Societe Generale will make its portfolio available in TriOptima, an external platform of
reconciliation used by the largest financial institutions. If you are not a member of TriOptima,
Societe Generale will send you its portfolio. We will ask you to whether send yours as an
Excel file via email or to upload it onto Quickport (a TriOptima service which makes it possible
for you to see the results of the reconciliation even though you are not a member of
TriOptima).
FYI: The portfolio reconciliation process is detailed in Q.36.

2. One-way delivery of portfolio data (in this case, you are deemed to be a Receiver): when
one counterparty is receiver : it does not have to send the portfolio but only to respond to data
obtained
In that case Societe Generale will send you an email two weeks before the reconciliation date
with a link to the web portal of Societe Generale E-reconciliation. You will then be able to
access your portfolio in CSV format, the main data of your transactions and their valuations.
You will have 5 working days to revert back to Societe Generale on any discrepancy you have
identified. Tools built into the platform will enable you to get back to us (approve, demand
correction, etc.). If you do not advise us of any discrepancy within these five working days,
you will be deemed to have agreed with the content of the portfolio and that the reconciliation
was effectively done.
It should be possible for Portfolio Data Receiving Entities to pick a specific date for
reconciliation if the one suggested by Societe Generale is not convenient, be it on a quarterly
or annual basis.
The checking of discrepancies: It can be any discrepancy deemed significant enough by

one of the parties. Thus, if a difference seems significant enough, Societe Generale will
contact you to analyse it with you, by sharing the parameters used in the valuation. If, after
this analysis, it turns out that the difference would be of contentious nature, we will enter into a
dispute resolution process with you. The resolution process is an exceptional procedure to
resolve disputes.
It breaks down as follows:
Either one or both parties shall notify each other by e-mail or other written means, that they
consider the discrepancy to be a dispute. Each party has five business days to involve
internally a competent decision maker; The two competent persons identified should then get
in touch to find a way to resolve this dispute.
Page 38 / 82
32. With whom should we register as Sender or Receiver?

You should register directly with your counterparties. Most of them should have sent you a
communication asking you whether you want to be a Sender or a Receiver.
Societe Generale SA has adhered to the ISDA EMIR Portfolio Reconciliation, Dispute resolution and
Disclosure protocol in August 2013.
We kindly advise you to do the same in order to formalise the agreement with your counterparties on
portfolio reconciliation. Please note that you do not need to have an ISDA Master Agreement in place
to adhere to the Protocol. You can find more information at:
http://www2.isda.org/functional-areas/protocol-management/open-protocols/
33. Should Trade Repositories be informed of our Sender/Receiver status?

No, you do not have to inform your Trade Repository of your Sender/Receiver status.
34. Do we have to report reconciliations?

EMIR does not require counterparties to report their reconciliation performance. However, disputes
with FCs that are (i) larger than 15 million Euros and (ii) outstanding for at least 15 business days
must be reported by the EEA financial counterparties to their domestic regulator on a monthly basis.
35. Which data must be reconciled?

Current interpretation of the regulation and the RTS is that the valuation data needs to be reconciled,
whatever the EMIR status of the counterparties (FC, NFC+ or NFC-). The remaining key trade terms
are reported to help identify the transaction. It is important to notify Societe Generale of any
discrepancy in these latter terms, in order to ensure that your description of the transaction is aligned
with that of your counterparty.
All major financial institutions active in the OTC derivative markets are working with ISDA on a
common transaction description template to send to counterparties. You should therefore receive the
same list of fields to reconcile from all banks.
Trade ID
Legal Entity Name
Counterparty Legal Entity Name
Current Notional/Quantity
Trade Currency
2nd Notional/Quantity (if applicable)
2nd Notional CCY (if applicable)
Underlying / Product ID
Page 39 / 82
Trade Date
End Date
MTM
MTM Currency
MTM Date
Buy/ Sell indicator
36. How does Societe Generale handle portfolio reconciliation with financial and
non-financial counterparties?
Reminder : Societe Generale elected to be Sender of data and allows its counterparties to choose
whatever solution suits them best.
A/ Portfolio Reconciliation Regulatory Framework

EMIR is setting new standards for the reconciliation of collateralised and non-collateralised (noncleared) OTC derivative transactions.
As a Financial counterparty, Societe Generale must comply with this new regulatory framework. This
section describes how Societe Generale will manage portfolio reconciliations in compliance with
regulatory obligations.
According to the reconciliation frequencies described in the tables below, Societe Generale will notify
counterparties on each risk valuation date and make portfolio data available to them.
B/ Frequency of reconciliation
Reconciliation and delivery statements frequencies are determined by EMIR, based on several
criteria:
-The number of deals covered by the contract;
-The classification of the counterparty Societe Generale is facing (FC, NFC+ NFC-
Societe Generale is willing to discuss with clients, on a case-by case basis, the possibility of using a
higher frequency of portfolio reconciliation. We cannot, however, guarantee that we will be able to
Page 40 / 82
accommodate your wishes.

A required reconciliation date notice will specify the frequency at which portfolio reconciliations must
be carried out by Societe Generale and its counterparties under the regulatory framework.
In compliance with EMIR, Societe Generale proposes two solutions for portfolio reconciliation:
1-Exchange of Portfolio Data
2-One-way Delivery of Portfolio Data
Societe Generale allows Portfolio Data Receiving Entities to switch from the one-way delivery to the
exchange of portfolio data. The terms under which a switch is carried out are not defined yet.
Both methods are explained in Q.31: Societe Generale will use TriResolve for the Exchange of
Portfolio Data and an internal tool e-reconciliation for the One-Way delivery of Portfolio Data.
C/ Detailed Portfolio Reconciliation Process focus on exchange of portfolio data

The bilateral transmission of data is available in 3 formats:
4
Format 1: You are a TriResolve subscriber

For counterparties which are TriResolve members, portfolios are fed directly on the platform
through an integrated solution, and reconciliations are performed automatically as scheduled.
Reconciliation reports are published online and counterparties can interact on a live basis
benefiting from a real-time view of unresolved discrepancies, smart matching for portfolio
reconciliation, and discrepancies resolution via exception management workflow.
Format 2: You are not a TriResolve subscriber but want to use the Quickport
functionality of TriResolve
For counterparties which are not TriResolve members, it is possible to download portfolios
directly into TriResolve free of charge. TriResolve QuickPort then delivers a summary of your
reconciliation results, indicating where differences exist with Societe Generale.
This solution does not grant online access to the TriResolve community. It does not allow a
real-time view of unresolved exceptions, smart matching for portfolio reconciliation, and
discrepancies resolution via exception management workflow.
Please see TriOptima website for more details:
http://www.trioptima.com/services/triResolve/triResolve-QuickPort.html
In parallel, as a Sender entity, Societe Generale will send its portfolio in CSV format to the
counterparty at the reconciliation date through a dedicated website. The counterparty will then
be able to validate or invalidate the content of the portfolio.
Format 3: You are not a TriResolve subscriber and you do not want to use TriResolve
QuickPort
If you do not want to use one of the first two options, you thus have to send us your portfolio
by email in Excel or CSV format. We will upload your portfolio in TriResolve.
Just as in format 2, as a Sender entity, Societe Generale will send its portfolio in CSV format
on the date of reconciliation, through a dedicated website, You will then be able to validate or
invalidate the content of the portfolio.
Under this format, you do not have access to TriResolve. You will not receive a summary of
the results of the reconciliation and you will not have access to the data online in TriResolve.
We will send you by email the discrepancies we will have identified.
TriResolve is a tool developed and provided by TriOptima which has become the industry standard
for portfolio reconciliation. For more information please check their website www.trioptima.com
Page 41 / 82
37. Who can we contact with any queries on portfolio reconciliation?

Societe Generale has set up a dedicated mailbox to answer clients queries on portfolio reconciliation
and dispute resolution: sgcib-portfolioreconciliation@sgcib.com
38. Does Societe Generale plan to conduct portfolio reconciliations centrally?

All OTC transactions traded with Societe Generale will be reconciled centrally. Societe Generale will
use TriResolve for the Exchange of Portfolio Data and an internal tool for the One-Way delivery of
Portfolio Data.
We would strongly encourage our counterparties to use TriOptima to perform the reconciliation.
Should you not use TriOptima, SG has got a dedicated web portal e-reconciliation allowing portfolio
reconciliation.
39. Did ISDA publish a Protocol for reconciliations & disputes? What about other
Protocols?
What about disruption of trading?
Yes there is a dedicated EMIR Portfolio Reconciliation & Dispute Resolution Protocol. Societe
Generale SA has adhered to it.
Adherence to the Protocol is not mandatory but it allows parties to standardize their contractual terms
on portfolio reconciliation. The number of adhering counterparties is increasing rapidly and we
encourage our clients to do the same. You can adhere directly on www.isda.org. To do so, you do not
need to be a member of ISDA, you can be located outside the European Economic Area and you do
not need to have an ISDA Master Agreement with Societe Generale.
For US clients: If you prefer to follow CFTC Dodd-Frank Portfolio Reconciliation rules and have
adhered to ISDA DF Protocol 2, this is acceptable to us. In this case, we will request you to sign the
ISDA Top-Up Agreement.
In order to be compliant with our regulatory obligations, we must establish a Portfolio Written
Reconciliation Arrangement as soon as possible to be able to continue trading without any risk
of disruption. In that respect, we ask you to fill out and return the standard form attached to our EMIR
communication if not already done.
40. Do we have to communicate our procedures for disputes?

You do not have to communicate your procedures for disputes to anyone except if required to do so
by your regulator.
Page 42 / 82
2.4.
Portfolio Compression
41. What is the purpose of portfolio compression?

The purpose of portfolio compression is to mitigate risk by reducing the outstanding notional of trades
and the number of counterparties. This is necessary for institutions to mitigate operational and capital
costs as well as to mitigate credit and operational risk exposure.
42. What are our obligations regarding portfolio compression?

Since 15 September 2013 onwards, all EEA counterparties (FC, NFC-, NFC+) with 500 or more OTC
derivative contracts outstanding with a single counterparty have been subject to the portfolio
compression obligation (Article 14 Technical Standards). Portfolio compression is based on two
requirements:
-Implement and maintain procedures to analyse the possibility of conducting a portfolio
compression exercise in order to reduce counterparty credit risk and engage in such portfolio
compression exercise if warranted. This must be done at least bi-annually.
-Make sure to be able to provide a reasonable and valid explanation to your relevant national
competent authorities if concluding that a portfolio compression exercise is not appropriate.
EEA entities were asked to undertake a first compression feasibility exercise before Dec. 31, 2013.
43. Is there any mandatory documentation regarding portfolio compression?

EMIR does not require a formalized agreement with the counterparty entering into compression with
Societe Generale.
Page 43 / 82
3. REPORTING
OBLIGATION
3.1. REPORTING GENERAL PRINCIPLES

3.2. REPORTING OBLIGATION IMPLEMENTATION
3.3. REPORTING DELEGATION SERVICE
3.4. INTERNATIONAL IDENTIFIERS
Page 44 / 82
3.1.
Reporting general principles
44. When does the reporting obligation under EMIR start?

EMIR reporting obligation started on 12 February 2014 for all asset classes (OTC and listed
derivatives).
For non-EEA Counterparties, there is no obligation for you to report your trades under EMIR when you
face an EEA entity.
Additional reporting obligation with regards to valuation and collateral will apply to EEA FC and NFC+
from August 2014
45. Who has to report under EMIR?

There are several possible scenarios:
Where the counterparties to a transaction are both EEA entities, both must report the
transaction to a registered trade repository.
Where one counterparty to a transaction is non-EEA entity, it has no obligation to report only
the EEA counterparty to this transaction would be obliged to report.
Where both counterparties are non-EEA entities, there is no obligation to report the
transaction under EMIR but other local regulations may apply.
46. What are the data which have to be reported?

The data to be reported to the Trade Repositories are divided in two categories: the counterparty
data and the common data. The counterparty data includes the information relating to each
counterparty to the transaction. The common data provides information about the transaction itself.
However, each Trade Repository may have its own specific way of presenting the data.
See Q.55 for more details.
47. How is the counterparty identified? Is there a need for consent?

The counterparty data includes the information relating to each counterparty to the transaction, i.e.
mainly through its LEI.
If the two counterparties are European and dealing within the EU there is in principle no need of such
consent
However,for a trade originating outside of the EU, then consent may be required in order to lift local
banking secrecy or confidentiality restrictions. Consent can be granted either through one of the two
ISDA protocols (Reporting Protocol or Portfolio reconciliation protocol) or by signing ad hoc SG letter
of consent.
Page 45 / 82
48. Is it necessary to report all the deals from 16 August 2012?

Yes:
The reporting start date (RSD) of transaction information depends on the transaction
execution date (historical versus new deals)
Transactions entered into after 16/08/2012 and still outstanding on the RSD must be reported
at D+1.
Transactions entered into before 16/08/2012 and not outstanding on that date are not subject
to EMIR reporting.
Transaction
Execution Date
Outstanding or Not on
2
RSD
Before and
outstanding on
16/08/2012
Not outstanding
On or After
1
16/08/2012
Not outstanding
February 12
th
2017
N/A
Outstanding*
February 12
th
2014
August 12
th
2014
February 12
th
2014
August 12
th
2014
After 12/02/2014
1.
2.
3.
Outstanding*
Common Data &

Counterparty Data
2
3
RSD (Article 1)
February 12
th
2017
th
May 13 2014
Valuation &
2
Collateral RSD
(Article 3)
N/A
August 12
th
2014
Including transaction executed on 16/08/2012

Reporting Start date
OJ EU 148/2013
*If transaction has matured before the second RSD (i.e. valuation &
collateral RSD), there is no reporting obligation for valuation & collateral
49. Who will have to report Valuation and Collateral as of August 12th 2014 ?
Only FC and NFC+ are concerned by valuation and collateral reporting. NFC- are exempted.
Page 46 / 82
50. What are the processes for the backloading of UTIs?
In this context, backloading is understood as the process of exchanging and agreeing on UTIs for all
EMIR-eligible transactions concluded before 12/02/2014 which were outstanding at this date.
Electronic trades will be backloaded using the following market infrastructures:
1. MarkitWire: Rates, Credit and Equity products

2. DSMatch: Credit and rates product
Notice that for all your cleared transactions, your Central Counterparty (CCP) will provide you with all
relevant UTIs.
Paper transactions with TriOptima members were backloaded on TriResolve. You should be able
to see all UTIs backloaded by SG CIB in the UTI section of their website.
Paper transactions not covered by TriOptima or with non-TriOptima members were backloaded on a
bilateral basis
Societe Generale sent an Excel file to every client containing the UTI of every transaction in
scope.
If you have not received your file as of today, please contact our dedicated team at sgcibemir@sgcib.com.
Transactions which matured before February 12th, 2014 but were outstanding as of August
th
16 , 2012 do not require a UTI as per the ESMA Q&A:
TR Question 4 [last update 4 June 2013]
Reporting of outstanding positions following the entry into force of EMIR (Backloading)
(c) Is an agreed Trade-ID also necessary for backloaded trades?
TR Answer 4
(c) To the extent that a backloaded contract is still outstanding at the time of reporting, a TradeID needs to be agreed between the two counterparties and reported, together with the other
information on that contract.
51. What are trade repositories?

Trade Repositories are entities registered and supervised by ESMA, who maintain centralized
databases relating to transactions in financial contracts.
Counterparties and clearing houses must report to a central data repository:
elements of any financial contract between them;

any modification or termination of the contract.
These declarations must be made no later than the following day of the conclusion, modification or
termination of the contract business day. EMIR covers all financial contracts, whether executed on
exchange or OTC. The obligation to declare applies to any counterparty to a financial contract,
whether financial or non-financial.
Page 47 / 82
52. Which are the recognised Trade Repositories?
So far, ESMA has authorised six trade repositories for reporting under EMIR:
DTCC Derivatives Repository Ltd. (DDRL), based in the United Kingdom;
Krajowy Depozyt Papierw Wartosciowych S.A. (KDPW), based in Poland;
Regis-TR S.A., based in Luxembourg;
UnaVista Ltd, based in the United Kingdom;
ICE Trade Vault Europe Ltd (ICE TVEL), based in the United Kingdom; and
CME Trade Repository Ltd (CME TR), based in the United Kingdom.
You can check also on ESMAs webpage : http://www.esma.europa.eu/content/List-registered-TradeRepositories
53. Is the data stored by TRs made public?

Each counterparty should be able to access the transactions it has reported as well as all the
transactions it is a party to, but which have been reported by a third party.
There is no obligation under EMIR to make the data publicly available on a real time basis. Therefore,
DDRL does not do so but it does publish a report of aggregated position level data.
However, the regulators do have access to detailed trade reports.
54. How should I select my Trade Repository? Are they all able to
effectively report any OTC asset?
The choice of a Trade Repository (TR) depends on your products, tools and business organization.
Thus Societe Generale cannot advise you on which TR would be the most suitable for your firm.
55. Could you elaborate on the format and technical aspects of the
reports?
The format and technical aspects of the reports depend on the Trade Repository you select. This is
the case for :
Transfer format (secured ftp, mail, Excel file, CSV file, xml, etc.);
Report format (there is no format specified by ESMA, simply the information which must be
included in it);
The reports are divided into 2 tables (for instance, DDRL chose to merge the 2 tables into a
single message);
Specific fields have been created for transactions on commodities: specifications should be
established by your Trade Repository.
We can however provide you with certain information:
Page 48 / 82
Even though there are MtM valuation & collateral fields (table 1, fields 17-21), NFC below the
clearing threshold are not required to fill them;
For a new transaction, the field 26 on table 2, which records the date and time of the
confirmation, should be initially set to zero and then updated once confirmations have been
exchanged;
In table 2, a reference is made to the UPI : You may want to refer to the ISDA taxonomy for
the moment as the issue has not yet been addressed by ESMA;
UPIs for listed derivatives contain information about price, date and so on. Consequently, the
fields in table 2 supposed to record these values can be left empty;
In table 2, field 1, the product ID must be given twice whenever the ISDA taxonomy is not
used (see EMIR Regulation p.189).
3.2.
Reporting obligation implementation:
56. What is the status of Societe Generales implementation of the reporting

obligation?
In order to ensure compliance with EMIR reporting obligations, Societe Generale has engaged in the
following steps:
-
Implementation of a reporting solution for Societe Generale on all asset classes compliant with
EMIR started in 2012;
Participation in industrys Working Groups to align our reports to markets best practices;
Contribution to DDRLs Working Groups to help define the industry solution design.
57. How will Societe Generale proceed if we do not use DDRL as our
Trading Repository?
The choice of another Trade Repository is possible, as TRs have an obligation to reconcile
transactions among themselves. Thus, you do not need to do anything specific in that respect, should
you use another Trade Repository.
Page 49 / 82
3.3. Reporting delegation service

58. Can you please advise if Societe Generale is planning to offer a
reporting service to its customers, i.e. do the reporting of its
customers trade data on their behalf?
If so, what are the conditions to subscribe to this service (Fee,
Societe Generale v. third party trades, timescales)?
Yes, Societe Generale offers a Reporting Delegation Service to its clients, free of charge. We are
therefore offering you to report on your behalf OTC trades in which we are your counterparty.
1. For your OTC Transactions
The transactions reported on your behalf are displayed through a dedicated website: eReporting.
Reports are also available directly within DDRL.
Should you decide to use that service, we will send you a contract to be signed. Data reported by
Socit Gnrale on your behalf remain under your liability.
Should you have any questions you can address them to sgcib-emir@sgcib.com. Given that SG is
using DDRL as its trade repository, only a Full Delegation Service is possible. Pursuant to this service
Socit Gnrale reports on your behalf all data related to our transactions (Common Data +
Counterparty Data). You have the opportunity to manage the delegation service per asset class but no
other ad hoc service is offered.
Upon request from an FC or NFC+, SG may offer collateral and valuation reporting (our offer
combines the two). However, it will be SGs own valuation. It should be emphasised that the position
of regulators is that counterparties who have delegated the reporting of their valuation must be able to
check periodically and correct the valuation reported if necessary.
2. LME-Registered Contracts
For any queries on the reporting of ETD transactions conclucted on the London Metal Exchange and
for which Socit Gnrale is your clearing broker, please contact sgcib-emir@sgcib.com
3.4.
International Identifiers
59. What is the LEI / Pre-LEI?

The Legal Entity Identifier (LEI) is a reference code to identify in a unique way a given entity that
engages in a financial transaction. Currently, there are many ways to identify entities, but there is no
unified global identification system for legal entities across markets and jurisdictions. The LEI will be a
linchpin for financial data the first global and unique entity identifier enabling risk managers and
regulators to identify parties to financial transactions instantly and precisely. Currently, public and
private organizations are joining efforts to develop the LEI, with the support of the Financial Stability
Board (FSB) and endorsement of the G-20. Until the LEI becomes operational, pre-LEIs have been in
production (see question below).
Page 50 / 82
60. Which LEI type do you expect to be the retained standard? Where and when
will it be available? Who will define and provide this standard? How would you
suggest dealing with these requirements for a possible interim period?
The final LEI will be an ISO standard (ISO17442).
While LEIs have not been issued yet, pre-LEIs have been in production since Q3 2013. In parallel,
GMEI codes are used as an interim solution (ISO compliant with LEI norm) for Dodd-Frank reporting
obligations. Legal Entities can register today with the CFTC (the US regulator) to obtain a GMEI,
which costs approximately USD 200.
At national level, LOUs Local Operating Units are national institutions which are in charge of
tracking LEIs in their respective countries. They represent the primary interface for entities wishing to
register for a LEI. They will be the local implementers of the global system. LOUs offer facilities such
as local registration, validation, and maintenance of reference data; protection of information that
must be stored locally; andfacilitates the use of local languages and organization types.
For instance, the French National Institute of Statistics and Economic Studies (INSEE) is the French
LOU. Each Legal Entity has to register with its national pre-LOU and provide it with the requested
certified information.
As a reminder, be aware that the LEI subscription needs to be renewed every year.
A pre-LEI is issued by any of the endorsed pre-LOUs of the Global Legal Entity Identifier System. The
list of endorsed pre-LOUs is available at:
http://www.leiroc.org/publications/gls/lou_20131003_2.pdf
The table below is a list of operating pre-LOUs, as of June 2014, indicating which ones are
multijurisdiction, i.e. that can register entities from all nationalities.
Sponsor
Pre-LOU website
Bundesanstalt fr
Finanzdienstleistungsa
ufsicht
French Ministry for
Economy and Finance
U.S. Commodity
Futures Trading
Commission
Capital Markets Board
of Turkey
UK Financial Conduct
Authority
Central Bank of Ireland
https://www.geiportal.org
Central Bank of
Russian Federation
Polish Financial
Supervisory Authority
Netherlands Authority
for the Financial
Markets
https://www.nsd.ru/en/services/lei
https://lei-france.insee.fr
Multijurisdicti
on
Yes
03 Oct
2013
No
03 Oct
2013
Yes
03 Oct
2013
https://www.ciciutility.org
http://www.takasbank.com.tr/en/Pages/LEI.
aspx
http://www.lseg.com/LEI
https://www.isedirect.ie
Date of
endorsem
ent
Yes
Yes
No
No
http://www.kdpw.pl/en/business/LEI/Pages/
default.aspx
No
http://www.kvk.nl/english/how-to-registerderegister-and-report-changes/legal-entityidentifier-lei/
No
11 Nov
2013
11 Nov
2013
07 Dec
2013
27 Dec
2013
27 Dec
2013
07 Jan
2014
Page 51 / 82
Financial Supervisory
Authority, Finland
http://www.prh.fi/en/uutislistaus/2013/P_104
8.html
Czech National Bank
http://www.centraldepository.cz/index.php/e
n/lei-pre-lei-legal-entity-identifier
https://lei-italy.infocamere.it/leii/Home.action
Banca dItalia and

Commissione
Nazionale per le
Societ e la Borsa
Banco de Espaa
National Bank of
Slovakia
Bundesanstalt fr
Finanzdienstleistungsa
uf
sicht
Royal Norwegian
Ministry of Trade,
Industry and Fisheries
Financial Services
Agency of Japan
(JFSA)
https://www.lei.mjusticia.gob.es/es/Paginas/
home.aspx
http://www.cdcp.sk/
No
07 Jan
2014
Yes
06 Feb
2014
No
07 Feb
2014
Yes
TBD
05 Mar 2014
21 May 2014
https://www.ceireg.de/banzlei/cust
Yes
21 May 2014
TBD
06 Jun 2014
TBD
22 Jul 2014
http://www.glei.no/
http://www.tse.or.jp/english/news/44/140704
_a.html
61. Can we report using identifiers other than the LEI (for instance BIC codes)?
No. Pursuant to the last Q&A published by ESMA, only LEIs are authorised for reporting purposes
(except for private individuals). It is our understanding that from now on, all EEA counterparties will
need a LEI.
62. As a non-EEA entity do I need a LEI for EMIR?

Yes, if you intend to enter into a derivative transaction with an EEA counterparty.
SG is aware that many jurisdictions do not yet have a local LOU.
The list of LOU allowing multi-jurisdiction is available in Q.60.
63. Is a LEI mandatory for out of EMIR scope reporting? For instance, what
happens when reporting to a European Trade Repository a transaction with a
counterparty that is subject to the reporting obligations under the Dodd-Frank
Act?
LEIs are required by both EMIR and DFA, so you will always need to use this type of identification if
you and/or your counterparty are subject to one of the two regulations. They may also be used in the
context of other regulations in the future.
Page 52 / 82
64. What are the LEIs used by Societe Generale and its affiliates?
Country
Entity
France
Societe Generale S A
Luxembourg
Societe Generale Bank & Trust
France
SG Option Europe
Maroc
SG Marocaine De Banques
Russie
Rosbank
France
Inter Europe Conseil
France
Credit Du Nord
Roumanie
BRD Groupe Societe Generale
Bulgaria
Societe Generale Expressbank
Czech
Republic
Komercni Banka as
Romania
BRD - Groupe Societe Generale SA
Slovenia
SKB Banka d.d.
Serbia
Societe Generale Srbija a.d.
Croatia
Societe Generale - Splitska Banka dd.
LEI Creation status

Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
Done
Certified
LEI
O2RNE8IBXP4R0TD8PU41
TPS0Q8GFSZF45ZZFL873
969500FDN8G43HMHZM83
549300WHIMVBNIDQWK21
HOXMZG026UQNRK6J0C60
VH4XNLMLBEU4NGDFRN07
54930076YK05WVH25M52
5493008QRHH0XCLJ4238
549300ASHQEYUZ8ARW85
IYKCAVNFR8QGF00HV840
5493008QRHH0XCLJ4238
549300H7CCQ6BSQBGG72
549300K2A8P5HGJ3B435
54930006A7BQRKDHV809
65. What is a UTI?

Unique Trade Identifier (UTI) designates a unique identifier on the transaction level agreed between
the two counterparties, used throughout the life of the trade. ISDA has been working on a white paper
on UTIs over the last few months. ESMA believes that in order to effectively match counterparties to a
contract, a Unique Trade Identifier (UTI) should be reported with each counterparty to allow for pairing
contracts. This will be particularly relevant when counterparties are reporting to two different TRs.
66. What is your approach to determining and communicating a UTI?

ESMA has described the UTI as a 52 character string with no prescribed format.
In order to ensure uniqueness across all reportable transactions, a UTI is comprised of two parts:
1. a UTI Prefix that is unique to the party generating the UTI up to 10 alphanumeric
Page 53 / 82
2.
characters (Party ID field);

a Transaction Identifier up to 42 alphanumeric characters (Text string).
The UTI prefix can be built from characters 7-16 of your LEI.
The UTI may be communicated through different media depending on the type of transaction:
When there is a central market infrastructure (electronic execution platform or Middleware)

which is willing to generate the UTI, then the central infrastructure will generate the identifier
and communicate it to both counterparties;
When there is no central market infrastructure, paper confirmation will be used. The
Generating Party will send a UTI to its counterparty via confirmation or affirmation.
67. What is Societe Generales approach to generating a UTI when transacting with
a non-EEA counterparty?
As of today, under the UTI Generation Logic we have elected to follow, Societe Generale will
systematically be the UTI Generating Party when facing a non-EEA counterparty. Therefore, non-EEA
counterparties will neither have to generate a UTI nor to match the one which Societe Generale will
create.
In the future, this may change if the local non-EEA regulator requires the counterparty to report
derivative transactions with an identifier. In this case, ISDA will work to ensure the UTI is given
prevalence.
68. The transaction I concluded is eligible to Dodd-Frank and EMIR, which trade
identifier should I use? The USI or the UTI?
Both ESMA and ISDA agree on the fact that whenever a deal is eligible to Dodd-Frank and EMIR it is
the Unique Swap Identifier (USI, the reference used for reporting purposes under Dodd-Frank), which
should be reported to the Trade Repository. This means that the USI should be used as the UTI.
Societe Generale is a Swap Dealer under the Dodd-Frank Act which means that if you are not yourself
a Swap Dealer, Societe Generale will generate a USI on all Dodd-Frank eligible transactions. This USI
should be used as a UTI for your own EMIR reporting purposes.
69. If we decide to report on our own, how do we manage the generation and
communication of a UTI?
In a nutshell, there are 4 different scenarios:
If there is a central infrastructure (electronic execution platform or middleware), it will

generate or communicate the UTI to both counterparties. You will use this UTI in your
reporting;
o FX: Bloomberg, GFI, ICAP, SwapEx, Reuters Transaction Services, Tullett Prebon,
Tradition, Barclays, 360t, SG Alpha, Currenex, Digital Vega, FX All, FX Connect,
FXCMpro, FX Inside, SG FX Trade, Trading Screen.
o Rates: MarkitWire, DSMatch, Bloomberg, DealerWeb, GFI, ICAP, Javelin, SwapEx,
Tullett Prebon, Tradition, trueEX, TradeWeb, Tradition.
o Credit: MarkitWire, DSMatch, ICE, ICE Link, Bloomberg, DealerWeb, MarketAxess,
Page 54 / 82
GFI, ICAP, Javelin, Tullett Prebon, Tradition, TradeWeb, Tradition.

o Equity: MarkitWire, Bloomberg
o Commodities: Bloomberg, CME, EFETnet, ICE eConfirm
If the transaction is cleared, the Central Counterparty (CCP) will generate and communicate
a new UTI;
If there is no central infrastructure and:
o If you are the Generating Party (see the table below to understand the logic used to
define who will be the Generating Party) you need to build an UTI as described (cf
Q61) ensuring uniqueness across all UTIs you generate. You will use it in your
reporting and communicate it to your counterparty via confirmation;
o If you are not the Generating Party, then you will recover the UTI generated by your
counterparty through the confirmation and update your report with this new reference.
Whenever possible, Socit Gnrale will rely on electronic media to communicate its
UTI.
FX: SWIFT messages, CLS, Misys

Credit: DSMatch
You can find more information on the UTI at:

http://www2.isda.org/attachment/NjI3MQ==/2013%20Dec%2010%20UTI%20Workflow%20v8.7.8b%2
0clean.pdf
The following table presents the industry best practices to determine the UTI Generating Party:
Asset Class
Credit
Rates
Product
Explanation
Generating Party
All
Exluding Swaptions
Floating Rate Payer (a.k.a "seller")

Floating Rate Payer of the underlying
swap
Swaptions
Cap/Floor
When a single Fixed

Rate Payer exists
Fixed Rate Payer, otherwise Reverse

ASCII sort if both have LEIs, LEI is GP if CP
does not have one
Debt Option
All
Option buyer
Exotic
All
Reverse ASCII sort if both have LEIs, LEI is

GP if CP does not have one
FRA
All
Fixed Rate Payer
IRS Basis
All

IRS Fix-Fix
All

IRS Fix-Float
All
Fixed Rate Payer
IRSwap:
Inflation
When a single Fixed

Rate Payer exists
Fixed Rate Payer, otherwise Reverse

ASCII sorti f both have LEIs, LEI is GP if CP
does not have one
IRSwap: OIS
All
Fixed Rate Payer
Page 55 / 82
Swaption
All
Option Buyer
XCCY Basis
All

XCCY Fix-Fix
All

XCCY Fix-Float
All
Fixed Rate Payer
Any product in
ISDA
Taxonomy
Equity
Commodity
Others
Seller of performance
If seller cannot be identified,
counterparties have to agree on GP
Exotic
Seller of performance
If seller cannot be identified,
counterparties have to agree on GP
Portfolio Swap
Agreements
The seller remains the seller regardless of

the performance of the underlying
Fixed Floating
Swap
Fixed leg seller (receiver of cash on the

fixed leg)
Option
Receiver of
premium payment
or Option writer
Seller
Swaption
Receiver of
premium payment
or Swaption writer
Seller
Option
Strategies
Collars, corridors,
multi-leg
Premium receiver
No premium
Alpha convention
Reverse ASCII sort, first LEI/Entity ID

The counterparty selling the currency
that occurs first in the 26-letter English
alphabet.
Forward
Cash rule
For FX Swaps, the Generating Party of

both legs of the swap would be
determined by applying the Cash Rule to
the far-leg of the Swap
NDF
Cash Rule
Same as Forward
FX
Options
Option seller
NDO
Option seller
Simple Exotic
Option Seller
Page 56 / 82
Complex Exotic
For a complex exotic product where

there is an unambiguous seller of the
product, then the Option Seller Rule
would apply. The seller determination
would be driven by the seller as agreed
in the standard FpML representation of
the product.
IF there is no clear seller, then the FX
Cash Rule would apply.
70. Can you specifiy the existing solutions offered by SGCIB with regards to the
communication of UTI by asset class?
Two distinct workflows exist with respect to the communication of the UTI: the electronic
workflow and the paper workflow. In terms of volumes, a majority of our transactions fall under
the former category except for commodities where paper transactions are more common.
1. ELECTRONIC WORKFLOW
Whenever a platform proposes the generation and communication of the UTI to both
counterparties SG CIB will rely on it. You will find hereunder a list of platforms which provide this
service. The main ones are:
1.
2.
3.
4.
5.
Foreign exchange: most execution platforms

Credit: DS Match and MarkitWire
Rates: MarkitWire and DS Match
Equity: MarkitWire
Commodities: ICE and EFET
Certain electronic platforms propose (i) to generate the UTI and/or (ii) to help communicate it to
the counterparties. If you have a question on this topic, please do not hesitate to contact us at
sgcib-emir@sgcib.com
2. PAPER WORKFLOW
Method
The so-called Paper Workflow covers all the cases where the UTI is not generated by a
central platform (execution and/or confirmation). SG relies on the following channels to
communicate the UTI:
MEDIA
ASSET CLASSES
Electronic
SWIFT Messages
-> Swift Net Accord
FX
-> Misys
Commodities
-> CLS
DS Match
Credit, Rates
Page 57 / 82
Confirmations
Credit, Rates, FX, Equity, Commodities
Paper
(T+0 -> T+3)

Affirmations
(T+0 -> T+1)
End-of-day Transaction Reports
Position Reports
SG eConfirmation
Platforms
SG eReconciliation
(UTI not live)
Credit, Rates, Commodities
Dynamic Portfolio Swaps
SG eReporting
TriOptima
Credit, Rates, FX
(UTI not live)
Equity, Commodities
71. I expected to receive a UTI from Societe Generale but it was not present in the
confirmation. What do I do?
If you are a financial counterparty, SG CIB anticipated following the ISDA Best Practices to determine
who should be the UTI Generating Party. If you wish SG CIB to generate UTIs on all transactions,
please inform sgcib-emir@sgcib.com.
In all cases, you should contact us at this email address for all UTI-related queries. SG will then
provide you with a UTI as soon as possible.
72. How does SG CIB generate its UTIs on multi-legged transactions?

There is no agreement at the industry level about the attribution of UTIs on multi-legged transactions.
Certain counterparties may elect to position their UTI at the master deal level while others may want
UTI on all the legs of the transactions. These discrepancies are expected to persist as long as an
industry-wide solution is not defined.
You will find below a table summarizing the way SG CIB generates its UTIs on such transactions.
Page 58 / 82
Asset Class
Type
Reporting
UTI
Rates
All
Master
(one report)
Master
(single UTI)
Credit
All
Master
(one report)
Master
(single UTI)
Semi Complex
Elementary deal
(multiple reports)
Elementary deal
(multiple UTIs)
Stripped Semi Complex
Elementary deal
(multiple reports)
Elementary deal
(multiple UTIs)
Stripped
Master
(one report)
Master
(single UTI)
Elementary deal
Elementary deals
(multiple reports)
(multiple UTIs)
Commodities
Equity
Foreign
Exchange
(Options)
FX Swap
All
SWIFTable elementary
deals
Elementary deal
(multiple reports)
Elementary deal
Non-SWIFTable
elementary deals
Elementary deal
Elementary deal
All
Elementary deal
Elementary deal
For FX Swaps, SG CIB generates a UTI on both the near and the far leg.
73. What is a UPI?

UPI is the Unique Product Identifier. This code should reference the Product Id (as per the EMIR
Technical Standards). UPI is cross referenced in various regulations (JFSA / DFA and EMIR) but its
more comprehensive definition is given by the CFTC as: Unique product identifier means a unique
identification of a particular level of the taxonomy of the asset class or sub-asset class in question.
To meet this request, the industry has developed an OTC taxonomy. The concatenation of the
taxonomy values provide a solution to UPI for data aggregation that is being used by reporting
counterparties and regulated platforms under the DFA scope. The ISDA OTC Taxonomy is also
approved as the UPI value for reporting globally in Japan, Australia, Hong Kong, Singapore, and
Canada.
ISDA has requested that ESMA endorse this standard for EMIR reporting.
We invite you to download the latest version of the ISDA OTC taxonomies at:
http://www2.isda.org/attachment/NDg5NQ==/ISDA%20OTC%20Derivatives%20Taxonomies%20%20version%202012-10-22.xls
Page 59 / 82
4. CLEARING
OBLIGATION
4.1. CLEARING OBLIGATION
4.2. FRONTLOADING
4.3. INTRAGROUP TRANSACTIONS
4.4. CLEARING THRESHOLDS for NFCs
4.5. COLLATERAL ON CCPS
Page 60 / 82
4.1. Clearing obligation

74. Which entities are subject to the clearing obligation and when do these entities
have to comply with the obligation?
The following entities are subject to clearing obligation:
EEA Financial Counterparties

EEA Non Financial Counterparties (NFC) that are above any one of the clearing thresholds
Counterparties located outside of the EEA that would be subject to the clearing obligation if
established in the EEA
An exemption applies for:

Certain counterparties (Central Banks)
Intra-group transactions (trades between entities in the same consolidation group on a full
basis) are exempt with conditions: Counterparties have to notify their competent authority in
advance that they intend to use this exemption
The clearing obligation will take effect following a phased implementation from six months to three
years after the entry into force of the RTS, depending on the types of counterparties:
Category
Description
Effective Date
Category 1
Counterparties which, on the date of entry into force of

the Delegated Clearing Regulation, are clearing
members for at least one of the classes of OTC
Derivatives of at least one CCP authorised before that
date to clear
6 months after the date of

entry into force, approx.
From June 2015
Category 2
FC that do not fall under Category 1

AIF that are non FC and not in Category 1 and
who belong to a group whose aggregated
uncleared derivative positions on a monthly
average, for the months of Nov. 2014, Dec. 2014
and Jan . 2015 are higher than 8 billion EUR.
12 months after the date

of entry into force,
approx. From February
2016
Category 3
Financial counterparties (FC) and AIFs who do not fall

in Categ. 1 or 2
18 months after the date

of entry into force ,
approx. From June 2016
Category 4
Non FC that do not fall under Category 1, 2 or 3
3 years after the date of

entry into force, approx.
From February 2018
There are clearing thresholds values calculated at group level, which only apply to NFC (defined in
gross notional value per asset class). The crossing of the threshold in any of the asset class
triggers mandatory clearing for all assets:
EUR 1 billion in gross notional value for OTC credit derivatives and OTC equity derivatives
EUR 3 billion in gross notional value for OTC interest rate derivatives and OTC foreign
exchange derivatives
EUR 3 billion in gross notional value for OTC commodity derivatives and other asset
classes not defined above
The calculation of the thresholds does not take into account hedging for commercial activities. It
includes transactions entered into by all other NFCs within the group on a worldwide basis. The
positions of entities that are Financial Counterparties are not aggregated.
Page 61 / 82
75. How is the product scope defined for OTC Clearing?

In accordance with Article 6 of EMIR, ESMA must establish and maintain a public register (which it
shall publish on its website) identifying those classes of OTC derivatives subject to clearing.
Identification of eligible EMIR Derivatives traded OTC will follow a two-fold approach:
Bottom up : Competent authorities of each Member State must notify ESMA of contracts
authorised for clearing in their Member State. ESMA will then determine whether to require
mandatory clearing of such contracts in all member states
Top down : ESMA can identify certain derivatives contracts to be cleared by an authorised
CCP. Relevant factors include standardization of contracts, liquidity and reliability of
available pricing. The effective date from which clearing is mandatory will be determined by
the expected volume and the ability for CCPs to manage the volume
Once the clearing obligation is declared to apply to a particular class of products of OTC derivatives, it
will apply to each transaction within that product class entered into either (i) on or after the date which
ESMA has established as the effective date for the obligation to clear that class; or (ii) on or after the
(earlier) date on which ESMA receives notification from a national regulator that a CCP has become
authorised to clear that product class of derivatives.
76. Which are the existing CCPs authorised for clearing ?

ESMA is still in the process of authorising CCPs and the eligibility of products has yet to be clarified.
The clearing obligation should come into force in June 2015.
As of August 2014, ten (10) CCPs have been authorised by ESMA, as follows :
Page 62 / 82
Source : http://www.esma.europa.eu/news/ESMA-adds-CME-Clearing-Europe-Ltd-list-registeredCCPs-under-EMIR
For your consideration, below is the link to all the non-EU CCPs that have applied to ESMA for
recognition under EMIR in those countries.
http://www.esma.europa.eu/content/List-applicant-central-counterparties-CCPs-established-non-EEAcountries-updated-24-April-20
77. Where can I see the list of products eligible for mandatory clearing?
A provisional list was published by ESMA in its consultation on clearing IRS and CDS.
Proposed IRS clearing obligation on four sub-asset classes, on a range of currencies and underlying
indices, all with constant or variable notional:
Basis Swaps
Fixed-to-float interest rate Swaps
Forward rate agreements
Overnight index Swaps
Proposed CDS clearing obligation on European untranched Index CDS (for iTraxx Europe Main and
iTraxx Europe crossover)
Page 63 / 82
78. Has SG already built a commercial offer for its clients/counterparties for this
service ?
SG offers client clearing through its fully owned subsidiary Newedge. On-boarded clients have
already started clearing OTC derivatives through this subsidiary (mainly IRS).
Below are some highlighted services provided for OTC clearing:
Newly-mandated centrally-cleared asset classes are a natural extension of Newedges leading

role in centrally-cleared derivatives
Memberships of all major CCP venues
Comprehensive central clearing offering for IRS, CDS and FX
Significant infrastructure and personnel investment
Cross-product portfolio margining
Collateral management facilitation
Active industry participation and lobbying
Commitment to support a variety of clearing models including emerging margin settlement
models and indirect clearing
Flexible approach to commercial models
Newedges agency model which mitigates risk and minimises conflicts of interest
79. What type of business model are you planning to set-up: CCP Member or Client
member?
Newedge is a member of all major CCPs (CCP Member), which are listed below:
The Americas: CME ClearPort - LCH US - CME IRS OTC - ICE OTC - Nodal - LCH Swpaclear
FCM
EMEA: CME Clearing Europe - ICE Clear Europe - LCH Clearnet Ltd - LCH RepoClear LCH
Enclear - LCH SwapClear - Eurex IRS OTC
Asia: SGX AsiaClear
In addition, Newedge is currently working on getting the following memberships within the next few
months:
The Americas: ICE Credit Clear - CME CDS
EMEA: CME IRS OTC - ICE Clear Europe CDS - LCH Clearnet CDS - LCH ForexClear
Page 64 / 82
4.2. Frontloading
80. What is frontloading?
Pursuant to current ESMA proposal, a frontloading obligation would be imposed to financial
counterparties of categories 1 and 2 (cf. question 74) from the publication of the clearing RTS until
the start date of the clearing obligation for products which present a minimum remaining maturity
duration of more than 6 months at the time of clearing.
Pursuant to such obligation, financial counterparties would have to identify all relevant trades during
the phase-in period (up to 18 months for non-clearing members) and backload them for clearing on
the clearing start date.
In view of the difficulty to price a transaction which is to be cleared in the future, such frontloading
obligation could lead to adverse consequences on market liquidity and stability. The industry is
therefore trying to obtain the removal of such obligation for non-clearing members and to keep it only
for clearing members, i.e. the largest financial institutions.
4.3. Intragroup transactions

81. What is an intragroup transaction?
A transaction is considered intragroup where both counterparties are within the same consolidation on
a full basis, subject to centralised risk evaluation, measurement and control procedures and
counterparties are established in the EU or in a recognized equivalent third country.
82. Are intragroup transactions excluded from the calculation of the clearing
thresholds?
No, EMIR only excludes OTC derivatives that are directly related to the commercial activity or treasury
financing activity of Non-Financial Counterparties (NFCs) from the calculation of the clearing
threshold. Thus, if a NFC enters into an intra-group transaction that does not fit the hedging definition,
as specified in the corresponding Technical Standards to be adopted by the Commission on the basis
of article 10(4), that transaction will have to be counted towards the applicable clearing threshold.
INTRAGROUP TRANSACTIONS NFC/NFC
If two NFC group entities enter into an intragroup transaction with each other which does not fit the
hedging definition, both sides of the transaction should be counted towards the threshold. The total
contribution to the group-level threshold calculation would therefore be twice the notional of the
contract.
INTRAGROUP TRANSACTIONS NFC/FC
For non-hedging intragroup transactions between one NFC and one Financial Counterparty (FC), only
the NFC side of the transaction needs to be counted towards the threshold.
Page 65 / 82
83. Is central clearing required for intragroup transactions?

There are two scenarios for which central clearing is not required for intragroup transactions :
1. If the counterparties (FC or NFC) are both established in the EU and have notified the
competent EU authorities which have not objected
2. If one counterparty (FC or NFC) is established in the EU and the other is located in a
recognized equivalent third country, and a prior authorisation was granted to the EU
counterparty by its competent authority.
84. Where should an entity notify or apply for Intragroup exemption?

Intragroup exemptions must be notified or applied by each counterparty to its own national competent
authority.
In France it depends on the nature of the entity:
-
The ACPR is competent for financial counterparties

The AMF is competent for non-financial counterparties
In the UK, the FCA is the relevant authority.
85. Do Intragroup exemptions also work with non EEA affiliates ?

An Intragroup exemption can be granted only if the affiliate is established in a non EEA country that
has been recognized equivalent by the European Commission.
86. When should intragroup exemption notifications or applications be made ?

Intragroup exemption notifications or applications should be made no later than 30 days before the
intended use of the exemption.
Exemption notifications and applications will have to be made gradually in accordance with the three
clearing phase-in periods proposed by ESMA (June 2015 for clearing members, June 2016 for nonclearing members and December 2017 for NFCs).
When counterparties are established in two different Member States, notifications will have to be
made when both national competent authorities are ready to receive these notifications.
Intragroup notifications for affiliates established in France can already be made.
Page 66 / 82
4.4. Clearing Thresholds for NFCs

87. What are the Clearing Thresholds?
The Clearing Thresholds are amounts of gross nominal positions set by class of OTC derivative
contracts. They will be reviewed on a regular basis after public consultation.
It concerns only NFC counterparties.
Currently the thresholds are set as follows:
Value of the clearing thresholds
Type of derivatives
1 billion
Credit derivatives
(in aggregate gross notional value of

outstanding non-hedging OTC derivative
transactions)
Equity derivatives
Interest rate derivatives
3 billion
(in aggregate gross notional value of
outstanding non-hedging OTC derivative
transactions)
Foreign exchange derivatives

Commodity derivatives & Others not defined above
88. How do the clearing thresholds work?

Preliminary remark : several questions are answered in the ESMA Q&A
CALCULATION
The thresholds are calculated per asset class of OTC derivative products, excluding transactions
aiming at reducing the risks directly related to the commercial activity or treasury financing hedging of
that entity,
TIME PERIOD
When the rolling average position of the related derivatives transactions over 30 working days
exceeds one or more thresholds, non financial counterparties (NFC) will have to start clearing new
OTC derivatives transactions but will be given a four month grace period to start clearing.
NOTIFICATION
Qualifying EEA NFCs (NFC+) will have to notify both ESMA and their relevant national competent
authority (e.g. the FCA in the UK) without delay if they cross one of the clearing thresholds. Non-EEA
NFC+ entities should notify their EEA counterparties of their status.
Financial regulators across the EU have been adopting their notification procedures.
-
For NFCs incorporated in the UK, notifications need to be made to the

FCA. Details of the notification process as well as the notification form are
available
on
its
notification
webpage.
http://www.fca.org.uk/firms/markets/international-markets/emir/emirnotifications-and-exemptions
Page 67 / 82
For NFC incorporated in France, notifications need to be made to the

AMF. Details of the notification process as well as the notification forms
are available on tis notification webpage
http://www.amf-france.org/Formulaires-et-declarations/Produitsderives.html
For the purposes of notifying ESMA, forms are also available on its webpage.
CONSEQUENCES OF CROSSING THE THRESHOLDS
Crossing the thresholds in one of the asset classes triggers mandatory clearing for all asset classes,
including transactions that qualify as hedging. The entity must clear all future OTC derivative
contracts through a CCP, for all asset classes whether they fall within the hedging exception or not,
with a four month applicable grace period following the crossing of the threshold.
Should NFC+ OTC derivatives positions fall below the clearing threshold at a later date the NFC will
become an NFC- and the clearing obligation ceases immediately, even if no clearing has actually
taken place. In this instance, the NFC should immediately notify ESMA and the relevant competent
authority of this change, or for non-EEA entities your EEA counterparts should be notified.
89. For NFCs, should contracts cleared on a voluntary basis be counted against
the clearing threshold?
OTC contracts cleared on a voluntary basis which do not qualify as risk reducing are included in the
calculation of the clearing threshold.
90. Should positions taken by financial subsidiaries of a Non-Financial

Counterparty be counted against the clearing threshold?
As per Article 10(3), only the positions taken by non-financial entities of the same group have to be
counted towards the clearing threshold. However, for transactions between two NFCs of a same
group, both sides of the transaction should be counted towards the threshold.
91. Do macro-hedges & proxy-hedges qualify as risk reduction trades?

Macro-hedges and proxy-hedges qualify as risk reduction strategies for the purpose of EMIR.
Page 68 / 82
92. What should be included in the calculation for the clearing thresholds?
When carrying out clearing threshold calculations, a non financial counterparty (NFC) shall disregard
OTC derivative contracts which qualify as hedging, i.e. those which are objectively measurable as
reducing risks directly related to its commercial activity or treasury financing activity or that of other
non-financial entities in its group.
The relevant Regulatory Technical Standard published by ESMA sets out the precise definition of
derivatives contracts that qualify for the hedging exception. In summary, this includes any activity
which:
covers risks incurred in the normal course of business; or

covers risks arising from fluctuations in interest rates, inflation rates, foreign exchange
rates, credit risk, etc.; or
qualifies as a hedging contract under International Financial Reporting Standards
(IFRS).
All non-hedging OTC EMIR Derivatives entered into by the NFC or by other non-financial entities of
the group, (irrespective of whether those entities are located within or outside the EEA) are to be
included in the clearing threshold calculation. Furthermore, transactions subject to an intragroup
exemption must also be taken into account in the calculation.
4.5. Collateral on CCPs

93. Does the Intragroup exemption obtained for clearing also apply for collateral
management?
No, a specific exemption must be requested for the Collateral obligation.
Page 69 / 82
94. In the case of collateral posted in the form of securities, what are the transfer
procedures put in place the CCPs and by the Clearing Members (and under
which legal regime - French, British, Belgian, etc.)?
Procedures vary among the transfer types, as follows:
1) Transfer in full ownership:
Collateral is posted to the Clearing House by Clearing by title transfer as detailed in the Clearing rules
and Clearing Membership Agreement.
2) Pledge in the depositarys account:
Securities posted to the clearing house are held in dedicated accounts at the respective custodians
3) Physical transfer without transfer in full ownership:
This is not an option for European Clearing Members, collateral is transferred to the Clearing House
by title transfer.
Note: For further details, we invite you to go through the CCP websites (cf. links below).
Eurex:
http://www.eurexclearing.com/clearing-en/cleared-markets/eurex-otc/
ICE:
https://www.theice.com/publicdocs/Regulatory_Clearing_Landscape.pdf
CME:
http://www.cmegroup.com/europe/clearing-europe/files/full-segregated-accounts.pdf
http://www.cmegroup.com/europe/clearing-europe/clearing/files/cme-clearing-otc-irssolution.pdf
http://www.cmegroup.com/europe/clearing-europe/risk-management/customer-protection-andsegregation.html
LCH:
http://www.lchclearnet.com/home
OMX:
http://www.nasdaqomx.com/europeanclearing/newsmandatorychanges/segregationportability/
KDPW:
http://www.kdpwccp.pl/en/kdpw_ccp/Authorisation%20of%20KDPW_CCP/Pages/default.aspx
95. Will the Clearing Member or a CCP be able to appoint any 3rd party collateral
manager?
CCP has put in place arrangements with Euroclear and Clearstream in relation to tri-party collateral.
Such collateral may only be used to cover Initial Margin requirements only.
Page 70 / 82
96. Will the collateral posted in the form of securities be re-used or transformed?
Collateral posted with the CCP can not be transformed or re-hypothecated by the CCP. However, the
CCP has a right of use on these securities in the event of default of the Clearing Member.
97. How does the Clearing Member handle the posting of collateral to the CCP?
Newedge passes all acceptable collateral to the CCP in relation to OTC Clearing. Newedge does not
rehypthecate or transform the collateral. Newedge may choose not to allow clients to deposit all CCP
eligible collaterall.
If clients send ineligible collateral to Newedge, we are able to offer transformation services.
98. How are client assets protected under EMIR?

EMIR (art. 39 (2)) aims to achieve protection of clients assets and positions against:
Fellow customer risk by mandating clearing members to offer their clients: at least, the choice
between omnibus client segregation and individual client segregation. They would also need
to inform their clients of the costs and the level of protection
Clearing member default
Clearing members have to keep separate records and accounts that enable it to distinguish
both in accounts held with the CCP and in its own accounts its assets and positions from the
assets and positions held for the account of its clients at the CCP
CCPs need to offer portability of positions and assets of the clients of the clearing members.
Portability would be triggered by the default of the clearing member
CCP default
Each CCP has to be authorised by ESMA, ensuring that it meets the criteria set out under EMIR
(default waterfall, living will, risk management framework)
99. What is portability?

Porting under EMIR rules can be defined as the transferring of client positions and assets on the
default of a clearing member to another clearing member designated by the client, the CCP must
commit to on the client's request and without the consent of the defaulting clearing member.
This definition applies equally to omnibus and individually segregated accounts, with the distinction
that in the case of omnibus client segregation the back-up clearing member must be designated by all
clients.
The important reservation is the new clearing member is only required to accept the positions and
assets if it has previously committed to do so.
Page 71 / 82
100. What segregation options are available at the CCPs?

EMIR mandates CCP to offer Individual Segregation and Omnibus Client Segregation models. CCPs
have developed the below high level models, although CCP offerings may vary. CCPs continue to
enhance their models to provide greater levels of protection and flexibility. This level of security needs
to be mirrored by the clearing members to their clients.
Page 72 / 82
5. COLLATERAL
OBLIGATION
Page 73 / 82
101. Do you know more about frequency? The kind of eligible collateral? The
minimum threshold amount, if any? What major changes do you anticipate
with respect to our current bilateral set up? Will we still be able to use your
valuations or will we be forced to value our products with our own models?
Under Article 11(2) of EMIR, the segregated exchange of collateral only involves Financial
Counterparties (FC) and qualifying Non Financial Counterparties (NFC+). They must implement and
maintain procedures for the timely, accurate and appropriate segregated exchange of collateral, other
than in respect of certain intragroup transactions.
The precise level and exact type of collateral to be exchanged will be specified in yet to be published
Regulatory Technical Standards (RTS). We will revert to you with more information once available.
BCBS and IOSCO issued a final policy framework to reduce systemic risk and promoting central
clearing on 2 September 2013 and has been globally followed by ESMA in its draft RTS recently
published.
http://www.bis.org/press/p130902.htm
Scope: Non-centrally cleared derivatives transactions between two covered entities
Requirement: Exchange Variation Margins (VM) (zero threshold) and the gross Initial Margins (IM)
(threshold EUR 50 m; segregated)Exemptions:
IM only: nominal exchange in cross-currency swaps, FX forwards and physically settled FX

swaps
Covered entities with less than EUR 8 billion nominal amount of non cleared derivatives
Eligible collateral
Alignment with Central Counterparty (CCP) practices in allowing a broad array of collateral
(cash, high-quality government and central bank securities, high-quality corporate & covered
bonds, gold)
Subject to haircuts
Phase-in of requirements :
st
Variation Margin : applies to all new contracts entered into after 1 December 2015
Initial Margin : phased-in implementation based on the notional amount of derivatives traded by the
group the covered entity belongs to
TRIGGER:
REQUIREMENT:
if aggregate month-end average notional

amount of non-centrally cleared derivatives
exchange 2-way INITIAL MARGIN

with a threshold up to 50mln:
for period:
exceeds (in billion):
Phase-in:
Jun-Jul-Aug 2015
3,000
Dec15 Nov16
Jun-Jul-Aug 2016
Jun-Jul-Aug 2017
Jun-Jul-Aug 2018
Jun-Jul-Aug 2019
2,250
Dec16 Nov17
1,500
Dec17 Nov18
750
Dec18 Nov19
8
Dec19 on
Page 74 / 82
102. What are the main requirements on Initial and Variation margins?
The present Table was made pursuant to the current proposal of ESMA. Therefore, they are
subject to change.
SGs
counterparty
FC
(NB
this
include a third
country entity if
its falls within
the
financial
counterparty
definition)
EU NFC+
Variation Margin
Must exchange
From 1 Dec 2015
Article FP1(1)
and counterparty
definition
Must exchange
From 1 Dec 2015
Article FP1(1)
Initial Margin
Article 1FP 3
Must exchange IM from:
Where both SGs and the
counterpartys Exposure is
above EUR 3 trillion
above EUR 2.25 trillion
above EUR 8 billion
Where either SGs or the
counterpartys Exposure in 2019
is below EUR 8 billion
Article 1FP 3
Must exchange IM from:
1 Dec 2015
1 Dec 2016
1 Dec 2017
1 Dec 2018
1 Dec 2019
SG and the
counterparty
may agree not
to exchange IM
1 Dec 2015

1 Dec 2016

1 Dec 2017

1 Dec 2018

above EUR 8 billion
1 Dec 2019

counterpartys Exposure in 2019
SG and the
counterparty
may agree not
to exchange IM
Page 75 / 82
EU NFC-
A third country
entity that would
be an FC if it
were in the EU
Need not
exchange
provided parties
agree not to do
so pursuant to Art
GEN 2(4)(b)
From 1 Dec 2015
Art FP1(1)
Must collect
From 1 Dec 2015
Art FP1(1) and
see para 3 on p7
of CP
Need not exchange provided SG and the NFCagree not to do so pursuant to Art GEN 2(4)(b)
If no agreement is reached, then timings set out for
EU NFC+ will apply.
Art 1 GEN (1), FP1 (3) and see para 3 on p7 of CP

Must collect IM from:
1 Dec 2015
1 Dec 2016

1 Dec 2017

1 Dec 2018

above EUR 8 billion
1 Dec 2019

counterpartys Exposure in
2019 is below EUR 8 billion
Third
NFC+
country
Must collect
From 1 Dec 2015
Art FP1(1) and
see para 3 on p7
of CP
SG and the
counterparty may
agree not to
exchange IM
Art 1 GEN (1), FP1 (3) and see para 3 on p7 of CP
1 Dec 2015
1 Dec 2016
1 Dec 2017
1 Dec 2018
1 Dec 2019
above EUR 8 billion
SG and the
counterpartys Exposure in 2019 counterparty
may agree not
to exchange
IM.
Page 76 / 82
Third
NFC-
country
Must collect (we

do not think Art
GEN 2(4)(b)
applies)
From 1 Dec 2015
Art FP1(1) and
see para 3 on p7
of CP
Art 1 GEN (1), FP1 (3) and see para 3 on p7

of CP

above EUR 8 billion
counterpartys Exposure in
2019 is below EUR 8 billion
1 Dec 2015
1 Dec 2016
1 Dec 2017
1 Dec 2018
1 Dec 2019
SG and the
counterparty may
agree not to
exchange IM.
Need not exchange provided parties agree not to
do so pursuant to Art GEN 2(4)(c)
If no agreement is reached, then timings set out
above will apply.
Need not
exchange
provided parties
agree not to do
so pursuant to Art
GEN 2(4)(c)
From 1 Dec 2015
Art FP1(1)
Exposure means the aggregate month-end average notional amount of all non-CCP cleared
derivatives (including foreign exchange forwards, swaps and currency swaps) for June, July and
August of the applicable year calculated on a group basis e.g. for the calculations for the 1 Dec
2015 commencement date the exposure will be calculated for June, July and August of 2015
Art 1(4) or (5)
exempt
counterparty
Please also note effect of Art GEN 2(4)(a) which is a minimum transfer amount of EUR 500,000.
Page 77 / 82
GLOSSARY
MOST COMMON TERMS AND ACRONYMS
CCP
Central Clearing Counterparty
Clearing
Clearing is a post-execution process in which an independent third party

known as a derivative clearing organization (DCO), central clearing
counterparty (CCP) or clearing house steps in between the original
parties to a derivative transaction and guarantees the performance of both
parties. The intent behind the clearing requirement is that, by having the
clearing house guarantee performance, clearing reduces the impact that a
default by one party could have on the other party or the rest of the financial
system. Parties to a cleared trade are required to post substantial amounts
of liquid collateral to the clearing house or to a member of the clearing
house as so-called margin.
Clearing threshold
The threshold size of derivative positions at group level specified for the
purposes of determining whether a non-financial counterparty is subject to
the clearing obligation under EMIR.
Confirmation
For the purposes of EMIR, confirmation means the documentation of the

agreement of the counterparties to all the terms of an OTC derivative
contract
Derivative
(Or derivative contract) a financial instrument as set out in points (4) to (10)
Section C, Annex 1 of MiFID
The European Economic Area comprises the 28 Member States of the
European Union, plus Iceland, Norway and Liechtenstein. Gibraltar and
Monaco also fall under EMIR.
As of today, the member states of the European Union are: Austria,
Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sweden and the United Kingdom.
EEA
The Outermost Regions of the Union are covered by EMIR: the Canary
Islands (SP), the Azores (PT), Madeira (PT), Martinique (FR), Guadeloupe
(FR), French Guyana (France), la Reunion (FR), the land Islands (FI),
Martinique (FR), Saint Martin (FR), and Saint-Barthlmy (FR).
The Overseas Countries and Territories of the Union are not covered by
EMIR: Akrotiri and Dhekelia (UK), Anguilla (UK), Aruba (NL), Bermuda (UK),
Bonaire (NL), British Antarctic Territory (UK), British Indian Ocean Territory
(UK), British Virgin Islands (UK), Cayman Islands (UK), Curacao (NL),
Falkland Islands (UK), French Polynesia (FR), French Southern and
Antarctic Territories (FR), Greenland (DK), Mayotte (FR), Montserrat (UK),
New Caledonia and Dependencies (FR), Pitcairn (UK), Saba (NL), Saint
Barthelemy (FR), Sint Eustatius (NL), Sint Maarten (NL), South Georgia and
South Sandwich Islands (UK), Saint Helena, Ascension Island, Tristan da
Cunha (UK), St. Pierre and Miquelon (FR), Turks and Caicos Islands (UK),
Wallis and Futuna Islands (FR), Jersey (UK), Guernsey (UK) & Isle of Man
(UK).
Page 78 / 82
EMIR
European Market Infrastructure Regulation
ESMA
European Securities and Markets Authority
FC
A Financial Counterparty a credit institution (a bank),an investment firm, an

insurance or reassurance undertaking, a registered UCITS fund, a pension
fund or an alternative investment fund managed by an alternative investment
fund manager (all as defined in the EU legislation under which the entity is
authorised or regulated).
GMEI (ex-CICI)
The Global Markets Entity Identifier utility, formerly known as the CICI utility,
is a Legal Entity Identifier (LEI) solution to standiardize the identification of
legal entities that engage in financial transactions
ITS
Implementing Technical Standards proposed by a European Supervisory

Authority (EBA, EIOPA or ESMA) and adopted by the European
Commission under powers conferred by an EU regulation or directive.
LEI
The Legal Entity Identifier (LEI) program is designed to create and apply a
single, universal standard identifier to any organization or firm involved in a
financial transaction internationally.
Mark-to-Market
(MtM)
The act of recording the value of a position or portfolio based on the day's
closing price. Instead of being valued at the original purchase price, the
portfolio is valued at its current worth, reflecting any profit or loss which is
not yet materialised but which would be if the position were sold
immediately.
MiFID
MiFID is the Markets in Financial Instruments Directive (Directive

2004/39/EC). It replaces the Investment Services Directive (ISD) which was
adopted in 1993, and came into force in 2008. It is a cornerstone of the EU's
regulation of financial markets. It seeks to improve the competitiveness of
EU financial markets by creating a single market for investment services and
activities, and ensuring a high degree of harmonised protection for investors
in financial instruments, such as shares, bonds, derivatives and various
structured products. MiFID has brought greater competition across Europe in
the provision of services to investors and between trading venues.
NFC
A Non-Financial Counterparty: cover any undertaking established in the EEA

which is not a Financial Counterparty
NFC +
An NFC whose derivative trading position exceeds one of the clearing

thresholds set out in the RTS.
OTC
Abbreviation for Over The Counter. An OTC market or trade is one

conducted directly between dealers and principals via a telephone and
computer network rather than via an exchange. In contrast to exchange
trading, there is no automatic disclosure of the price of deals to other market
participants and deals and traded instruments are not standardised.
OTC derivative
A derivative contract whose execution does not take place on a regulated

market as defined in MiFID or on a third country market considered as
Page 79 / 82
equivalent to a regulated market
RTS
Regulatory Technical Standards proposed by a European Supervisory

Authority (EBA, EIOPA or ESMA) and adopted by the European
Commission under powers conferred by an EU regulation or directive.
Trade Repository
Trade repositories centrally collect and maintain the records of derivatives.

Under EMIR (Titles VI and VII of Regulation EU n648/2012), ESMA has
direct responsibilities regarding the registration, supervision and recognition
of Trade repositories. In particular, Article 55 of EMIR provides that a trade
repository shall register with ESMA. The registration of a trade repository
shall be effective for the entire territory of the Union.
UPI
UPI is the Unique Product Identifier. This code should reference the Product
Id (as per the EMIR Technical Standards). UPI is cross referenced in various
regulations (JFSA / DFA and EMIR) but its more comprehensive definition is
given by the CFTC (17 CFR part 43) as: Unique product identifier means a
unique identification of a particular level of the taxonomy of the asset class
or sub-asset class in question. In 2012 the industry made recommendations
to the CFTC Technology Advisory Committee (TAC) on the development of
UPIs for OTC derivatives (derived from the ISDA OTC Taxonomy) and
requested further input on the level of granularity of the UPI.
USI
Unique Swap Identifiers (USI), which is the CFTC term, is an identifier on the
transaction level that stays unique throughout the life of a trade. ISDA has
published an overview document with USI design and guiding principles to
be used for the generation and consumption of a USI. This document
includes the treatment of USI in various workflow scenarios. The CFTC has
published a document with the technical specifications for a USI.
UTI
Unique Trade Identifier (UTI) designates a unique identifier on the

transaction level agreed between the two counterparties, used throughout
the lifecycle of the trade. We are expecting the ISDA white paper on the UTI.
ESMA believes that in order to effectively match counterparties to a contract,
a Unique Trade Identifier (UTI) should be reported with each counterparty to
allow for pairing contracts. This will be particularly relevant when
counterparties are reporting to two different TRs.
Page 80 / 82
Contacts
If you need more information, do not hesitate to contact your Sales people who will
mobilise our team of experts.
You can also send an email to our dedicated address,sgcib-emir@sgcib.com
Societe Generale Corporate & Investment Banking is one of the three pillars of Societe Generale.
Present in all major markets with nearly 10,000 employees in 34 countries across Europe, the
Americas and Asia-Pacific, we are a vital player in fuelling the economic growth through our key role of
intermediary between issuers and investors. As a Corporate and Investment bank, we support our core
clients in their long-term and strategic goals across four essential functions: financing, advisory
services, risk management and investment solutions. In these areas, our teams both offer issuers
corporates, financial institutions, the public sector a broad access to markets and investors, and
provide investors institutionals and retail such as funds, asset managers, private banks, insurance
companies and family offices , smart solutions and access to investment opportunities.
SOCIETE GENERALE
SOCIETE ANONYME CAPITAL SOCIAL 975 339 185 EUR
SIEGE SOCIAL 29BD HAUSSMANN 75009 PARIS FRANCE
552 120 222 R.C.S. PARIS
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the
exercise of professional judgment. Neither Societe Generale S.A. nor Societe Generale Corporate & Investment Banking can accept any responsibility for loss occasioned
to any person acting or refraining from action as a result or any material in this publication. Even though SG CIB has made every reasonable effort to present current and
accurate information, SG CIB does not however guarantee the accuracy and the currency of any information contained herein. On any specific matter, reference should be
made to the appropriate advisor
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EMIR

Questions & Answers

Version: October 2014

The European Market Infrastructure Regulation, EMIR, is one of the outputs of

WHAT IS EMIR? SOME GENERAL QUESTIONS ....................................................................... 16

A GENERAL PRESENTATION OF EMIR......................................................................................... 17

2. RISK MITIGATION TECHNIQUES (NON-CLEARED TRADES) ..................................................... 32

REPORTING GENERAL PRINCIPLES ............................................................................................. 45

4. CLEARING OBLIGATION ................................................................................................................ 60

CLEARING OBLIGATION .............................................................................................................. 61

5. COLLATERAL OBLIGATION .......................................................................................................... 73

INDEX BY KEY TOPICS

Initial & variation margins

Means available for

ISDA Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol .

ISDA NFC Representation Protocol

CSA documentation (margin requirements for uncleared trades).

Scope (asset classes)

Data, Key term to

Societe Generale handling

Valuation & Collateral reporting

Delegation service (reporting)

Newedge/ client clearing

Matching and confirmation tools

ABOUT THIS DOCUMENT

Latest updated version of the Q&A dated 10 July 2014

Q&A for Non-Financial Counterparties & dedicated webpage

Esma public register page

Autorit des marchs financiers (AMF)

The International Swaps and Derivatives Association (ISDA) English

For your information

This question or paragraph is not relevant for non-EEA counterparties

1.1. A general presentation of EMIR

EMIR has 3 main objectives:

Mitigate counterparty risks and reduce systemic exposure to derivatives;

Reduce operational risks;

Increase market transparency.

Clearing of standard OTC derivatives;

FYI : Exemptions are presented in question 9

The mandatory obligations:

When does it begin?

FC, NFC-, NFC+

Daily mark to market valuation

FC, NFC-, NFC+

FC, NFC-, NFC+

FC, NFC-, NFC+

June 2015 at the earliest

February 2016 or June

Initial variation and margin

Apply to contracts where

Rules to be aligned with

Capital against uncollateralised

In force (Art. 11.4 EMIR).

* Stricter rules apply to FC and NFC+

FYI : thresholds are presented in paragraph 4.4 or questions 87 to 92

2. Which are the entities impacted by EMIR?

A financial counterparty (FC), which is an investment firm, credit institution(bank), insurer,

Refer to Q. 87 for the details on the Clearing thresholds for NFCs.

3. How does EMIR apply to funds?

4. How does EMIR impact a firm ?

FYI : thresholds are presented in paragraph 4.4 or questions 87 to 92

The timely confirmation of the terms of the OTC derivative contract;

FC, NFC+ and NFC(timely confirmation,