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EMIR introduced a temporary exemption for PSAs from the clearing obligation to allow time for a suitable technical solution for the transfer of non-cash collateral as variation margins to be developed by CCPs. With the two possible extensions already granted, there is no possibility to further extend this temporary exemption under EMIR. However, a further extension of the temporary exemption is part of the Refit negotiations.
ESMA, in its statement, indicates it expects national competent authorities to not prioritise their supervisory actions towards entities that are expected to be exempted again in a relatively short period of time, and to generally apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in a proportionate manner.
From a legal perspective, neither ESMA nor competent authorities possess any formal power to dis-apply a directly applicable EU legal text or even delay the start of some of its obligations. Therefore, any changes to the application of the EU rules would formally need to be implemented through EU legislation, and in this case through the amendments to EMIR resulting from the Refit negotiations.
ESMA nonetheless acknowledges the difficulties that certain PSAs would face to start clearing their OTC derivative contracts on 17 August 2018 in the eventuality the Refit proposal is not applicable by then, and during this expectedly limited period of time until the day when the exemption will be effective again. In this respect, ESMA expects competent authorities to not prioritise their supervisory actions towards entities that are expected to be exempted again in a relatively short period of time and to generally apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in a proportionate manner.