NFC- under the EMIR Regulation means a non-financial counterparty (NFC) which has not exceed the clearing thresholds.


Within the class of NFC- sometimes further sub-types of counterparties are differentiated, which are categorised as "Large NFC-" and Small NFC-".


This segregation is performed, for example in the ESMA's EMIR Review Report no.1, Review on the use of OTC derivatives by non-financial counterparties, 13 August 2015, ESMA/2015/1251 (p. 12) in the following manner:


- within each asset class, it was calculated the 99% percentile in terms of notional amounts;


- this means that the sum of outstanding notional amounts of all the counterparties with positions above that threshold account for 99% of the market in each asset class;


- this group of counterparties above the 99% percentile includes financial counterparties (FCs), NFC+, and NFC-.


- subsequently, all the NFC- in this group are categorised as "Large NFC-" while the others are categorised as "Small NFC-".


In the Letter of 27 January 2017 to the European Commission on the EMIR Review and ESMA sanctioning powers under EMIR and CRAR (ESMA70-708036281-19) "ESMA agrees that there is a large number of NFCs, namely NFC-s, that should benefit from lighter requirements under EMIR, including a different trade reporting requirement, to strike the balance between limiting the burden and still providing accurate and comprehensive transparency on the OTC derivative market, and an exemption from certain requirements such as the clearing obligation."




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