On 30 November 2020, the FCA updated its EMIR news webpage adding commentary on the following two topics:

• Notifying us of clearing thresholds for UK FCs and NFCs under UK EMIR. The FCA states that when UK EMIR comes into force at the end of the transition period, UK financial counterparties (FCs) and non-financial counterparties (NFCs) must notify it if they exceed the clearing thresholds under Article 4 of UK EMIR. Such entities will need to complete their first clearing threshold notification under UK EMIR by 17 June 2021. In particular, they will need to determine their aggregate group, month-end, average position of over-the-counter (OTC) derivatives in each asset class for the previous 12 months and compare them with the clearing thresholds as prescribed by UK EMIR. The FCA adds that all UK FCs and NFCs subject to the clearing obligation must submit a first notification, regardless of whether they choose to calculate their positions. This also applies if they are a UK FC or NFC and were subject to the clearing obligation before the UK EMIR regime came into force. Following the first notification, if an entity chooses to calculate their positions in OTC derivatives, they should perform this calculation every 12 months. There is no requirement to notify the FCA if there’s no change to the result of the subsequent calculations. Entities must always notify the FCA if the result of their calculation in OTC derivatives means that they no longer exceed the clearing threshold in Article 4 of UK EMIR.
• UK equivalence decision under UK EMIR for intragroup exemptions from the clearing obligation and margin requirements for uncleared derivatives. The FCA refers to a direction HM Treasury published in November that will grant partial equivalence to the EEA states under Article 13 of UK EMIR in relation to intragroup exemptions from the clearing obligation and margin requirements for uncleared derivative transactions. This direction will take effect immediately following the end of the transition period. In practice, this means that intragroup exemptions which the FCA granted for trades between UK and EEA group entities will expire on 1 May 2021 for margin exemptions (4 months after the coming into effect of the directions) and 1 March 2021 for clearing exemptions (2 months after). However, the direction will allow firms to apply for intra-group exemptions with no expiry date. To prevent unnecessary administrative burden on firms, the FCA states that it is adapting its process to make it easier for firms that wish to apply for these new intragroup exemptions. UK firms that currently benefit from intragroup exemptions from the clearing obligation and margin requirements for uncleared derivative transactions with their EU group entities covered by this equivalence decision must: (i) notify the FCA of the entity pairs to which the equivalence direction applies; and (ii) confirm whether there have been any other changes to the conditions under which the original intragroup derogation was granted. To continue benefitting from existing exemptions, firms  must submit notifications to the FCA by 1 February 2021. This will ensure the FCA can review the notifications within the 3-month timeframe (for margin exemptions) and 30-day timeframe (for clearing exemptions) as prescribed in UK EMIR. For intragroup exemptions from the margin requirements for uncleared derivative transactions, firms should send notifications to MarginIGT@fca.org.uk. For intragroup exemptions from the clearing obligation, UK firms normally submit notifications via the FCA’s Connect system but for the purposes of this notification only, should send notifications to EMIR@fca.org.uk.