ISDA details a further six areas, specific to its mission of fostering safe and efficient derivatives markets, where treating the EEA as a third country would result in a cliff edge. It would welcome confirmation from the FCA that it will either phase in these requirements or not follow its baseline approach. These relate to:
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Definition of OTC derivatives under EMIR;
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Availability of intragroup exemptions for transactions between UK and EEA counterparties;
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Equivalence of EEA trading venues for the purposes of the UK derivatives trading obligation;
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Capital treatment of exposures to EEA counterparties;
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Use of ratings published by EEA eligible credit assessment institutions; and
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Impact on EMIR REFIT and derogations under EMIR.
Lastly, the EU commodity derivative regime, including position limits, has traditionally been an area where ISDA and others have sought clarity and ISDA puts several markers down in this response where it would be happy to engage with the FCA to ensure that this regime works once onshored.
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