EU: Italy and 20 other countries are facing infringement proceedings over the Derivatives Directive

Brussels – The European Commission has decided to launch infringement proceedings by sending a letter of formal notice to 21 countries (Belgium, Bulgaria, the Czech Republic, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Hungary, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, and Finland) for failing to fully transpose the EMIR Targeted Review Directive, which consists of targeted amendments to the UCITS (Undertakings for Collective Investment in Transferable Securities) Directive, the Capital Requirements Directive (CRD) and the Investment Firms Directive (IFD). In effect, it introduces changes to the rules on counterparty risks in derivatives transactions.

“The EMIR Targeted Review Directive aims to provide a uniform set of rules to address counterparty risk in derivatives transactions carried out by undertakings for collective investment in transferable securities (UCITS) and cleared by a central counterparty (CCP) recognised as such under the EMIR Regulation,” the European Commission noted. “In order to encourage credit institutions and investment firms to adapt their business models to ensure compliance with the new requirements for the clearing of derivatives,” the Capital Requirements Directive and the Investment Firms Directive “have been amended to strengthen their risk management practices and to adequately monitor and mitigate concentration risk, as well as to provide supervisory authorities with additional specific tools and powers in the context of excessive concentration risk,” the Commission continued.

The deadline for transposing these amendments was 25 June 2026, but, to date, 21 Member States have not notified the Commission that they have fully transposed the Directive. The Commission is therefore sending letters of formal notice to the Member States concerned, which now have two months to respond, complete transposition and notify the Commission of the measures taken. In the absence of a satisfactory response, the Commission may decide to issue a reasoned opinion.