On 27 April 2018, the European Securities and Markets Authority (ESMA) published a letter it had sent to the European Commission asking for clarification relating to the exemptions from the financial obligations under Article 41 and 42 of EMIR.

The letter notes that at a recent ESMA Board of Supervisors meeting there was a discussion regarding whether a central counterparty (CCP) could exempt certain clearing members (typically public entities such as governmental entities, central banks and supranational entities) from the financial obligations under Articles 41 and 42 of EMIR (i.e. to provide the CCP with initial margins and default fund contributions). In particular, it was noted that there are different practices across EU CCPs, and different interpretations across relevant national competent authorities of “credit exposures” from clearing members which are public entities. ESMA considers that as this issue relates to the scope of EMIR, it is the Commission which is best placed to provide clarification.