On 11 December 2025, the Bank of England (BoE) published a consultation paper (CP) setting out its proposal to exempt transactions carried out as part of a post-trade risk reduction (PTRR) service from the derivatives clearing obligation set out in Article 4 of the UK version of the European Market Infrastructure Regulation (UK EMIR).

Summary

The BoE explains that Article 4 of UK EMIR requires that all eligible over-the-counter derivative contracts are cleared by a central counterparty and that the BoE is responsible for specifying the products subject to the clearing obligation. As part of the Financial Services and Markets Act 2023, the BoE gained a power to exempt transactions arising from PTRR services from the clearing obligation where it is necessary or expedient for the purposes of advancing its financial stability objective. 

The BoE sets out that it considers that exempting transactions arising from PTRR services would support its financial stability objective by reducing complexity and increasing the efficiency of PTRR services and should also support access to PTRR services for a wider range of market participants, allowing them to reduce their counterparty, operational and basis risk. The BoE further sets out that it intends that would unlock resources, that would otherwise be managing these risks, for other purposes for example, increasing greater liquidity in the system which in turn benefits financial stability or as capital, to support innovation and growth.

Next steps

The BoE has asked for feedback on this CP by 11 March 2026.