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An extension of pension schemes’ temporary exemption from clearing rules – which would require them to hold cash against derivative positions – is under discussion as part of so-called “Refit” negotiations between the EU Council and the European Parliament.
However, it is too late for an agreement on this to enter into force by the time the current reprieve runs out in mid-August.
In a statement published, ESMA guided regulators “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”.
The UK’s Financial Conduct Authority (FCA) said it would not require pension schemes or their counterparties to start putting processes in place to clear derivatives in line with EMIR.
“This approach is subject to any further statements that may be issued by ESMA or the FCA,” the UK regulator added. “We, in any event, continue to recognise that the clearing of derivatives is a prudent risk management tool.”