EU Moves to Further Delay the Bilateral Margin Requirements for Uncleared Derivatives
05/04/2020The European Supervisory Authorities have published updated joint draft Regulatory Technical Standards amending the existing EU risk mitigation techniques for uncleared OTC derivatives. In December 2019, the ESAs published a draft RTS to amend existing bilateral margin requirements made under the European Market Infrastructure Regulation in line with certain clarifications made to the related international framework by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions. These updated draft RTS include all those amendments and also delay the upcoming bilateral margin requirements to bring the EU framework in line with the global timeline. In response to the coronavirus outbreak, the Basel Committee announced in April 2020, a one-year deferral for the implementation of the final two phases of the joint Basel Committee and International Organization of Securities Commissions' framework for non-centrally cleared derivatives margin requirements.
The revised deadlines would mean that the new margin requirements will only apply to covered entities with an aggregate average notional amount of non-centrally cleared derivatives greater than €50bn from September 1, 2021 and those with an AANA greater than €8bn from September 1, 2022. This further extends the deadlines for the implementation of these margin requirements from the previous extensions made in July 2019.
The ESAs have submitted the final draft amending RTS to the European Commission for formal adoption. Pending finalization of the EU legislative process, the existing deadlines continue to apply.
View the updated final draft amending RTS on margin requirements.
View details of the Basel Committee announcement.
View details of the December 2019 final draft amending RTS on margin requirements.
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