The core focus of the European Markets Infrastructure Regulation (EMIR) is to raise the levels of transparency of institutions dealing in Over the Counter (OTC) derivatives. This is done to ensure that the regulator together with the European Securities Market Authority (ESMA) are able to tell the amount of turnover, the players in the sector, and whether or not there is an abuse of the market by the financial market institutions. Perhaps the other key objective of EMIR is to significantly reduce the number of counterparties so as to reduce the overall operational risks of market participants.
EMIR reporting does not just regulate those involved in financial markets alone instead, it also touches on the non-European Union organizations that happen to trade with EU organizations. This broad regulation of EMIR Transaction Reporting is divided into transaction reporting, clearing, and risk mitigation. The three sub-areas are all geared towards ensuring market sanity and dealings that are free of market manipulation.