On 16 December 2019, the European Commission adopted a Commission Delegated Regulation supplementing the European Markets Infrastructure Regulation with regard to regulatory technical standards on the specification of criteria for establishing the arrangements to adequately mitigate counterparty credit risk associated with covered bonds and securitisations and amending Delegated Regulations (EU) 2015/2205 and (EU) 2016/1178.

In terms of the Commission Delegated Regulation:

  • Articles 1 and 2 set the clearing exemption conditions for over-the-counter derivative contracts which are concluded by covered bond entities in connection with a covered bond and by a securitisation special purpose entity in connection with a securitisation; and
  • Articles 3 and 4 respectively amend Commission Delegated Regulation (EU) 2015/2205 and Commission Delegated Regulation (EU) 2016/1178, in order to take into consideration the new drafting of Article 4 of the European Market Infrastructure Regulation that includes two of the clearing exemption conditions for covered bonds included in these delegated regulations.