This Consultation Paper (CP) sets out the Prudential Regulation Authority’s (PRA) and Financial Conduct Authority’s (FCA) proposals to establish or extend exemptions for some products subject to bilateral margining requirements, and to align implementation phases and thresholds to the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) standards.
The proposals in this CP would result in changes to the UK version of Commission Delegated Regulation (EU) 2016/2251 of 4 October 2016 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards for risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty (hereafter Binding Technical Standards (BTS) 2016/2251), the Technical Standards under Article 11(15) of the European Market Infrastructure Regulation (EMIR).
This CP is relevant to PRA-authorised firms that are financial counterparties for the purposes of Article 2 of EMIR. In addition, this CP is relevant to all FCA solo-regulated entities and non-financial counterparties in scope of the margin requirements under UK EMIR.
The PRA and FCA are proposing to amend BTS 2016/2251 using the making and amendment powers under Article 11(15) of EMIR and under Section 138P of the Financial Services and Markets Act 2000 (FSMA). These proposed changes would be effective on publication of the final technical standards instrument, which is planned for Thursday 1 July 2021.
Responses and next steps
This consultation closes on Wednesday 19 May. The PRA and FCA invite feedback on the proposals set out in this consultation. PRA-regulated firms should address any comments or enquiries to: CP6_21@bankofengland.co.uk. FCA solo-regulated firms should address any comments or enquiries to firstname.lastname@example.org. Other respondents should submit responses to both authorities.