The European Commission has adopted a Delegated Regulation supplementing the European Market Infrastructure Regulation as regards regulatory technical standards for risk-mitigation techniques for over-the-counter derivative contracts not cleared by a central counterparty.

The Delegated Regulation is split into four chapters:

  • the first chapter covers the requirements concerning the risk management procedures for margin exchange, detailed procedures for specific cases, the approaches to be applied for the margin calculation, the procedures around margin collection, the eligibility, valuation and treatment of collateral, the operational aspects and requirements concerning trading documentation;
  • the second chapter includes exemptions from the above requirements;
  • the third chapter covers procedures for counterparties and the relevant competent authorities when applying exemptions for intragroup derivative contracts including process, timing and notifications to authorities; and
  • the fourth chapter includes transitional and final provisions. The need for international convergence, the possibility of regulatory arbitrage, and the specific characteristics of the over-the-counter derivative market within the EU make necessary a staggered implementation of the above requirements in some specific cases such as intragroup transactions, equity options and foreign exchange forwards.

The Delegated Regulation is now subject to an objection period by the European Parliament and the Council of the EU after which it will be published in the Official Journal of the EU. The implementation of the Delegated Regulation will begin one month after its entry into force.

View Commission adopts new rules to mitigate risks in non-cleared OTC derivative transactions, 4 October 2016

View Commission Delegated Regulation of 4.10.16 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards for risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, 4 October 2016

View Annexes to Commission Delegated Regulation of 4.10.16 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards for risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, 4 October 2016

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