FCA proposes changes to UK EMIR intragroup regime

Key points

On 1 November 2025, the FCA launched a consultation on proposed amendments to the UK EMIR intragroup regime, with a view to streamlining the intragroup exemption process and reducing the operational burden on UK market participants.

On the same day, HM Treasury published a related policy note and a draft statutory instrument setting out the legislative changes required to implement the revised framework.

If adopted, the proposed changes will:

• remove the requirement for an equivalence determination to be in place before an intragroup exemption can be used for transactions with non-UK entities;
• replace the current application process with a simpler notification-based regime, subject to a 30-day FCA non-objection period;
• align the approval timing for clearing and margin exemptions;
• remove the requirement for entities to notify the FCA when extending existing margin exemptions to new transactions;
• remove the disclosure requirement for entities relying on margin exemptions;
• grandfather existing temporary intragroup exemptions obtained under the current transitional regime; and
• consolidate all intragroup requirements in the UK Margin Rules¹.

The consultation will close on 16 January 2026. The Treasury intends to lay the draft statutory instrument before Parliament in the first half of 2026 so that the new framework can take effect when the temporary transitional regime expires at the end of 2026.

The FCA intends to publish a Policy Statement and final rules in 2026.

Removal of equivalence requirement for permanent intragroup exemptions

Under UK EMIR, intragroup transactions may be exempt from the clearing and margining obligations if they meet certain criteria.

One such criterion for a transaction between a UK entity and a non-UK entity is that the non-UK jurisdiction must benefit from an equivalence decision under UK EMIR. In the absence of equivalence, firms can only rely on temporary exemptions, obtained under The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019.

Currently, these exemptions are due to expire on 31 December 2026. However, if adopted, the proposed changes will:

1. grandfather on a permanent basis existing temporary exemptions obtained under the 2019 Regulations; and
2. remove the equivalence requirement for future permanent exemptions, making it easier for fully consolidated entities to obtain these in the future.

Existing notification requirements will remain but will be modified and aligned across the clearing and margining frameworks (see A more streamlined application process below).

The changes will bring UK EMIR more closely into line with EU EMIR, which was amended in a similar way in 2024. Although other UK/EU EMIR divergences will persist (most notably, the new EU EMIR active account requirement), this regulatory alignment will reduce operational complexities for firms operating cross-border, in line with the FCA's long-term strategy.

A more streamlined application process

The proposed changes will also streamline the exemption application process by:

1. replacing the current requirement for FCA approval for exemptions with non-UK entities with a 30-day non-objection period;
2. removing the requirement for firms to notify the FCA if they enter into new transaction types with a counterparty already covered by a margin exemption;
3. aligning the notification requirements applicable to financial counterparties and non-financial counterparties;
4. removing the disclosure requirement for entities relying on intragroup margin exemptions; and
5. consolidating the margin exemption provisions so that they are all housed in the UK Margin Rules², rather than across multiple legislative sources.

The FCA is expected to consult on draft rules for the non-objection process and the related documentation requirements in due course.

These operational changes reflect the FCA's commitment to reducing the operational burden on UK firms and are likely to be welcomed by the market.

Guidance on application of ESMA Q&As

The FCA has also confirmed that it will issue guidance in due course clarifying which of ESMA's EMIR Q&As will no longer form part of their supervisory expectations once the proposed changes are in force.

Specifically, the FCA proposes revoking OTC Questions 6 (a)-(c), (f) and (g) (which relate to the timing and mechanics of intragroup exemption applications) but retaining OTC Questions 6 (d), (e) and (h) (which relate to the demonstration of appropriate centralised risk evaluation, measurement and control procedures, specific intragroup scenarios involving a financial counterparty, and the availability of the exemption to AIFs), consistent with the FCA's approach to EU non-legislative materials.

This clarification provides market participants with welcome certainty on the post-Brexit application of specific ESMA Q&As.