EBA, EIOPA and ESMA propose amendments to bilateral margin requirements

The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published a final report on draft Regulatory Technical Standards (RTS), proposing to simplify the bilateral margin requirements of the European Commission’s Delegated Regulation (EU) 2016/2251. The proposed amendments aim to simplify the bilateral margin framework for counterparties that are subject to initial margin requirements and that are below the €8 billion threshold for exchanging initial margin foreseen by the European Market Infrastructure Regulation (EMIR). The changes are intended to facilitate the phase-out of initial margin requirements for these counterparties. They also support greater consistency with the treatment applied in other jurisdictions. In the current framework, counterparties that are below the threshold are exempt from exchanging initial margin for new uncleared over-the counter (OTC) derivative contracts but continue to exchange initial margin for existing contracts. With the proposed amendments, counterparties would no longer be required to exchange initial margin for either new or existing contracts if they are below the threshold. The amendments respond to requests from ma...