The FCA has updated its webpage on EMIR, stating that it supports the European Supervisory Authorities’ (ESAs) statement of 24 November 2017 on the variation margin requirements under EMIR for physically settled FX forwards. Our blog on the ESAs’ statement can be found here.

The FCA also states that:

  • the amendments to the Regulatory Technical Standards on risk mitigation techniques for OTC derivatives not cleared by a central counterparty (the RTS) should become increasingly clear over time and it would expect firms to make their plans as a result;
  • although how the RTS will be amended is not completely clear at the moment, the proposals outlined in the ESA’s statement can be used by firms as an indication of what the amended requirements may look like; and
  • the FCA will not require firms whose physically settled FX forwards are likely to be outside the scope of the amended requirements to continue putting processes in place to exchange variation margin. This approach is subject to any further statements that may be issued by the ESAs or the FCA.

View FCA EMIR webpage, 8 December 2017