On 27 November 2025, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) jointly published Policy Statement 23/25 – Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251 (PS23/25).

PS23/25 is relevant to those firms that are in scope of the margin requirements under the UK European Market Infrastructure Regulation.

Final policy

The final policy set out in PS23/25 follows an earlier consultation, CP5/25.

In CP5/25, the PRA and the FCA (jointly, the regulators) proposed to:

  • Implement an indefinite exemption for single-stock equity options and index options from the UK bilateral margining requirements. In PS23/25 the regulators confirm that they have decided to maintain their draft policy as consulted on.
  • Remove the obligation to exchange Initial Margin (IM) on outstanding legacy contracts where a firm subsequently falls below the in-scope thresholds. In light of the responses to CP5/25 the regulators have decided to implement the proposals as consulted with the minor change to the text to achieve greater consistency within the instrument.
  • Permit UK firms to use another jurisdiction’s threshold assessment calculation periods and entry into scope dates to determine whether those transactions are subject to certain IM requirements, when transacting with a counterparty subjected to the margin requirements in that jurisdiction.  While maintaining the outcomes proposed in CP5/25, the regulators state in PS23/25 that they have made minor amendments to the draft legal instruments annexed to the consultation. The regulators have made a small change to the language of Article 28 1a to ensure consistency across the drafting of the rest of the article. The FCA has also amended its instrument to add to Article 28 paragraph 1D(c) the text ‘the option to release initial margin already collected’. This removes a minor drafting difference from the PRA’s instrument and does not have any impact on the have regards analysis, impact assessment or cost benefit analysis set out in CP5/25.

As regards the third proposal the regulators also note in PS23/25 that respondents asked for clarification as to whether the following scenarios were within the scope of the proposal: (i) UK counterparties subject to margin requirements in the UK and in a third country; and (ii) non-UK counterparties indirectly caught by the margin rules of another jurisdiction. In response the regulators confirm that the scenarios that the respondents raised are not in scope of the proposals. They add that the proposal only applies to UK counterparties transacting with a third-country counterparty that is subject to margin requirements in a third-country jurisdiction. The proposal does not seek to descope UK firms from UK requirements even if they are subject to requirements elsewhere, nor can it fill any gaps in a third-country regulatory regime.

Next steps

The final technical standards instruments were submitted to HM Treasury (HMT) for approval on 11 August 2025 and 15 August 2025 respectively, and HMT is deemed to have approved the PRA’s technical standards instrument on 11 September 2025 and the FCA’s technical standards instrument on 24 September 2025.

The amendments to the technical standards will be effective on 27 November 2025.