European Union:
European Commission Adopts Delegated Regulation On RTS On Risk Mitigation Techniques For Uncleared OTC Derivative Contracts Under EMIR
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On October 4, 2016, the European Commission adopted a Delegated
Regulation supplementing EMIR (the Regulation on OTC derivatives,
CCPs and trade repositories) (Regulation 648/2012) with regulatory
technical standards ("RTS") on risk mitigation techniques
for uncleared OTC derivative contracts, together with related
Annexes (C(2016) 6329 final).
The Delegate Regulation sets out the levels and types of
collateral that OTC derivatives counterparties must exchange
bilaterally if the transaction is not cleared through a central
counterparty ("CCP"). In the event that one counterparty
to the transaction defaults, the margin collected will protect the
non-defaulting counterparty against resulting losses.
The Joint Committee of the European Supervisory Authorities
(ESAs) submitted the final draft RTS to the Commission in March
2016. In July 2016, the Commission informed the European Banking
Authority that it intended to endorse the draft RTS with some
amendments, including in relation to the concentration limits for
pension scheme arrangements and the timeline for.
The Council of the EU and the European Parliament will now
consider the Delegated Regulation. If neither of them objects to
it, the Delegated Regulation will enter into force 20 days after
its publication in the Official Journal of the EU.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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