Joint ESAs publish amendments to the EMIR Margin RTS
This afternoon, the Joint Committee of the ESAs ("ESAs") submitted an amended version of the EMIR Margin RTS to the European Commission. The amended EMIR Margin RTS contains a number of particularly relevant changes, being:
1. The amended EMIR Margin RTS follows BCBS and IOSCO by amending the phased entry into force of the obligation to collect initial margin for non-cleared OTC derivatives. For counterparties with an AANA of more than EUR 50 billion, the obligation to collect initial margin will still come into effect on 1 September 2020, but for counterparties with an AANA of more than EUR 8 billion and less than EUR 50 billion, the obligation to collect initial margin will take effect on 1 September 2021.
2. The Final Report, which comprises the amended EMIR Margin RTS, states that the ESAs have not considered it necessary to amend the EMIR Margin RTS to clarify that there is no need for operational implementation and legal documentation, as long as the threshold of EUR 50 million for collecting initial margin collection has not been exceeded. The ESAs also follow BCBS and IOSCO in this respect, and find that the EMIR Margin RTS can already be read in this manner.
3. The amended EMIR Margin RTS also stipulates that variation margin for physically settled FX forwards and physically settled FX swaps must only be mandatorily exchanged to the extent that, in summary, both counterparties are credit institutions.
What will follow now? The ESAs have presented the Final Report, containing the amended EMIR Margin RTS, to the European Commission. As soon as the European Commission has adopted the amended EMIR Margin RTS, a scrutiny period will follow, during which the European Parliament and the European Council will have the opportunity to consider the amended EMIR Margin RTS. After the end of the scrutiny period, the revised EMIR Margin RTS will be published in the Official Journal. The amended EMIR Margin RTS will take effect one day after publication in the Official Journal.
The Final Report, comprising the amendments to the EMIR Margin RTS, can be found here:
Joint ESAs publish amendments to the EMIR Margin RTS
https://esas-joint-committee.europa.eu/Pages/News/EMIR-RTS-on-various-amendments-to-the-bilateral-margin-requirements-and-joint-statement-on-the-introduction-of-fall-backs-i.aspx