ESAs Publish Joint Q&As on Bilateral Margining RTS

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The European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) has published three Joint Questions and Answers (Q&A) on RTS 2016/2251 on bilateral margin requirements under the European Markets Infrastructure Regulation (EMIR).

The purpose of the Joint Q&As on bilateral margin requirements is to promote common supervisory approaches and practices in the application of EMIR. It provides responses to questions posed by the public, market participants and competent authorities in relation to the practical application of the Regulation.

The Joint Q&As on Bilateral Margining clarify different aspects regarding the bilateral margin regime under EMIR:

  • the relief covered by a partial intragroup exemption from bilateral margin requirements;
  • the procedure to grant intragroup exemptions from bilateral margin requirements between a financial counterparty and a non-financial counterparty that are based in different Member States; and
  • the exemption regime from bilateral margin requirements for derivatives entered into in relation to covered bonds.

Background

The Joint Q&As were developed by the ESAs based on their joint mandate (under Article 11(15) of EMIR) to define bilateral margin requirements.

The clarifications provided in relation to the exemption regime from bilateral margin for intragroup transactions and covered bonds aim to ensure that the supervisory activities of the competent authorities under the Regulation are converging along the lines of the responses adopted by the ESAs. It should also help investors and other market participants by providing clarity on EMIR requirements.

 

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