On 3 December 2021, the Bank of England (BoE) published a Policy Statement containing its final policy on the proposal to add Overnight Index Swaps (OIS) that reference TONA to the scope of contracts subject to the derivatives clearing obligation.
The BoE’s final policy maintains the proposal in an earlier consultation to add TONA OIS contracts with an original maturity between 7 days and 30 years to the clearing obligation. However, the BoE has amended the date on which this change will come into force from 6 December 2021 to 31 January 2022.
The BoE’s final policy has been implemented via amendments to Commission Delegated Regulation (EU) 2015/2205 of 6 August 2015 supplementing the European Markets Infrastructure Regulation with regard to regulatory technical standards on the clearing obligation (hereafter Binding Technical Standards (BTS) 2015/2205).
As noted in Section 2.4 of the Policy Statement published in September titled ‘Derivatives clearing obligation – modifications to reflect interest rate benchmark reform: Amendments to BTS 2015/2205’, the BoE will continue to monitor developments in the USD interest rate derivatives market and, where possible, co-ordinate with the Commodity Futures Trading Commission on changes to respective clearing obligations. The BoE expects to consult on changes to the clearing obligation relating to the contact types referencing USD Libor in 2022.