On Feb. 13, 2023, EU CMSN issued final Reg 2023/314 on date of application of risk management procedures; and Reg 2023/315 on RTS on clearing obligation date.
Regulations in force on the day following publication in the Official Journal, Feb. 14.
ESAs issued draft RTS proposing to amend regulation on bilateral margin requirements and a final report with draft RTS proposing to amend regulations on clearing obligation.
Also follows ISDA Nov. 2021 signed letter to EC/ESAs re intragroup, see #121917.
Final Reports
EBA, EIOPA, ESMA issued a final report with draft regulatory technical standards (RTS) proposing to amend the regulation on risk mitigation techniques for over-the-counter (OTC) derivatives not cleared by a central clearing counterparty (CCP) under EMIR.
Proposes extending temporary exemptions regime for intragroup contracts by 3 years.
The objective is to accommodate the ongoing assessment of third-country equivalence and allow for a review of the intragroup exemptions framework under the EMIR review.
ESMA also issued RTS proposing to amend clearing obligation regulations under EMIR.
Intragroup Contracts
Bilateral margin delegated regulation, and clearing obligation delegated regulations, originally introduced temporary exemptions for intragroup contracts with third-country group entities, to facilitate centralized risk management-procedures for groups.
These exemptions provided a temporary solution in parallel to the assessment period for the relevant equivalence decisions under EMIR’s permanent exemption framework.
The ESAs consider a review of EMIR framework for intragroup exemptions for contracts with third countries, and its interaction with the capital requirements regulation (CRR), would be desirable, and scheduled upcoming review of EMIR offers this opportunity.
As the current temporary exemptions regime expires on Jun. 30, 2022, and in order to avoid negative consequences, the draft RTS propose extending the regime by 3 years.
Next Steps
The ESAs have now submitted these draft RTS to the EU CMSN for endorsement.
They are then subject to non-objection by the EP and the EU CNCL; the ESAs have published a statement to provide clarification through the approval procedure.
Oct. 2022 EC Adoption
On Oct. 25, 2022, EU CMSN adopted regulation (C(2022)7326) on risk management.
The delegated act introduces a modification to EC delegated Reg 2016/2251.
Article 36, 37 are amended in following way: exemption for cross-border intragroup transactions is extended to Jun. 30, 2025, for jurisdictions where no equivalence has been adopted by the EC pursuant to Article 13(2) of EMIR for purpose of Article 11(3).
Regulation shall enter into force on the day following that of its publication in the OJ.
EC also adopted regulation (C(2022)7175) amending RTS on clearing obligation date.
The act introduces a modification to the three existing RTS on the clearing obligation.
Article 3 of Reg 2015/2205 (interest rate derivative classes), Reg 2016/592 (credit derivative classes), and Reg 2016/1178 (interest rate derivative classes) are modified.
Article 3(2) in each is amended to extend deferred date of application of the clearing obligation for intragroup transactions with third-country group entity to Jun. 30, 2025.
Feb. 2023 Official Journal
On Feb. 13, 2023, EU CMSN issued final Reg 2023/314 on date of application of risk management procedures; and Reg 2023/315 on RTS on clearing obligation date.
Regulations in force on the day following publication in the Official Journal, Feb. 14.
Exemption regime is extended until Jun. 30, 2025.
Regulators
EU CMSN; EU EBA; EU EIOPA; EU ESMA
Entity Types
Bank; Depo; Exch; IA; Inv Co; OTC; SIFI
Reference
OJ L 43/2, L 43/4, 2/13/2023; PR, Reg 2023/314, Reg 2023/315, C(2022)7175, C(2022)7326, 10/25/2022; PR, Rp ESMA70-451-164, PS ESAs 2022 20, 6/13/2022; Rp ESAs 2022 13, 6/10/2022; EMIR Reg 648/2012; CRR Reg 575/2013; Reg 2016/2251; Citation: Reg 2015/2205; Reg 2016/592; Reg 2016/1178; Reg 2016/2251; C(2022)7326; C(2022)7175; Reg 2023/314; Reg 2023/315;
