It’s Official

17 February 2021. Delegated Regulations further amending the EMIR Margin RTS and amending the three Clearing Obligation RTS have today been published in the OJ. They will both enter into force on the following day- 18 February 2021.

Amendments to the Margin RTS

• Extension of equity options derogation until 4 Jan 2024
• Extension of intragroup transaction derogation until 30 June 2022
• Establishment of a 12 month window during which UK entities may novate legacy trades to the EU without triggering new margin obligations. The window runs from the Brexit end of transition, so accordingly closes on 1 January 2022
• The permanent exemption from the requirement to post/collect VM for both physically settled FX forwards and swaps where one of the counterparties is not a credit institution, investment firm “institution” or third-country equivalent
• Changes to the application dates of IM Phase 5 and 6 i.e. 1 September 2021 for phase 5 and 1 September 2022 for phase 6

Amendments to Clearing RTS

• Extension of intragroup transaction temporary derogation until 30 June 2022
• Establishment of a 12 month window (from entry into force) during which UK entities may novate legacy trades to the EU without triggering new clearing obligations. The window will close on 18 February 2022

Note that 30 June 2022 is also the expiry date of the temporary grant of equivalence in respect of UK CCPs (primarily LCH).

The intention had been to fast-track approval, allowing for entry into force prior to the Brexit end of transition. While perhaps not so fast, entry into force of the above amendments will be of some comfort to compliance officers who had been relying on forbearance.

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