On 3 July 2018, the European Securities and Markets Authority (ESMA) issued a statement on the clearing obligation for pension scheme arrangements (PSAs) with the objective to avoid, to the extent possible, disruption to certain PSAs who may face potential challenges clearing their over-the-counter derivative contracts on 17 August 2018, when the current, and final, exemption from the clearing obligation under EMIR expires.

The ESMA statement provides that:

“From a legal perspective, neither ESMA nor competent authorities possess any formal power to dis-apply a directly applicable EU legal text or even delay the start of some of its obligations.Therefore, any changes to the application of the EU rules would formally need to be implemented through EU legislation, and in this case through the amendments to EMIR resulting from the Refit negotiations.

ESMA nonetheless acknowledges the difficulties that certain PSAs would face to start clearing their OTC derivative contracts on 17 August 2018 in the eventuality the Refit proposal is not applicable by then, and during this expectedly limited period of time until the day when the exemption will be effective again. In this respect, ESMA expects competent authorities to not prioritise their supervisory actions towards entities that are expected to be exempted again in a relatively short period of time and to generally apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in a proportionate manner.”