On 16 March 2021, the European Commission issued a consultation on a draft Delegated Regulation extending for a year the temporary exemption from the central clearing obligation for pension scheme arrangements (PSAs).

The European Market Infrastructure Regulation (EMIR) provides for a temporary exemption from the clearing obligation for PSAs meeting certain criteria. This transitional period is set out under Article 89(1) of EMIR and provides further time for central counterparties (CCPs), PSAs and clearing members to develop viable technical solutions which would allow PSAs to meet the cash variation margin calls of CCPs.

The temporary exemption has previously been extended given that no viable technical solution has emerged. The EMIR REFIT Regulation prolonged the exemption until 18 June 2021. Article 85(2) of EMIR provides that it is possible to further extend the temporary exemption by two years maximum through two Commission delegated acts, while the ultimate aim of EMIR remains central clearing for PSAs.

In the draft Delegated Regulation the Commission is proposing to prolong the existing exemption by an additional year.

The deadline for comments on the consultation is 13 April 2021.