On 6 May 2021, the European Commission adopted a Delegated Regulation extending the transitional period referred to in Article 89(1), first subparagraph, of the European Market Infrastructure Regulation (EMIR).

EMIR provides for a temporary exemption from the clearing obligation for pension scheme arrangements (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 been extended over the years, since no viable technical solution has emerged. The recent review of EMIR (Regulation (EU) No. 834/2019, “EMIR Refit”) prolonged the exemption until 18 June 2021. In accordance with Article 85(2) it is possible to further extend the exemption by two years maximum through two Commission delegated acts, while the ultimate aim of EMIR remains central clearing for PSAs.

The Commission is proposing to prolong the existing exemption until 18 June 2022, by means of the Delegated Regulation.

The Delegated Regulation enters into force on the day following that of its publication in the Official Journal of the European Union.

There has also been published a report from the Commission to the European Parliament and the Council assessing whether viable technical solutions have been developed for the transfer by pension scheme arrangements of cash and non-cash collateral as variation margins and the need for any measures to facilitate those viable technical solutions. In the report the Commission proposes to adopt the Delegated Regulation extending the central clearing exemption until June 2022.

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