The European Commission has published a letter it has sent to the Joint Committee of the European Supervisory Authorities (ESAs) informing them that it intends to endorse, with amendments, the draft regulatory technical standards (RTS) on risk mitigation techniques for over-the-counter derivative contracts not cleared by a central counterparty under Article 11(15) of the Regulation on over-the-counter derivative transactions, central counterparties and trade repositories (EMIR). The Commission explains in its letter that it intends to make a number of clarifications and restructure the legal text of the draft RTS. The amendments include:
- the introduction of a recital containing reasoning for the delayed phase-in of the requirements for equity options;
- clarification that EU counterparties wishing to rely on the intragroup exemption may submit their application after the RTS enters into force;
- clarification that cash initial margin may be held with equivalent third country institutions, as well as with authorised EU credit institutions;
- clarification that requirements relating to foreign exchange contracts should start to apply from the date of application of the relevant MiFID II Delegated Act as opposed to the date of entry into force of MiFID II; and
- changes to one provision relating to concentration limits for pension scheme arrangements.
The Commission has also proposed an adjusted implementation timeline since it believes that the implementation dates proposed by the ESAs, although in line with international principles, are no longer viable.