On 15 December 2016, the delegated act made under Article 11(3) of the European Market Infrastructure Regulation (EU) 648/2012 ("EMIR") was published in the Official Journal of the European Union. The delegated act, which was adopted by the European Commission on 4 October 2016, sets out the EU requirements for margining non-cleared OTC derivatives (the "Margin Rules").
The timetable for implementation of margin requirements for non-centrally cleared derivatives was agreed at international level by the Basel Committee on Banking Supervision and IOSCO. The Commission and the European Supervisory Authorities did not reach agreement on the Margin Rules in time for the original implementation date of 1 September 2016 for exchange of margin by the largest counterparties by volume.
The delegated act enters into force on 4 January 2017, i.e. twenty days after publication in the Official Journal. Mandatory exchange of initial and variation margin for the largest counterparties will apply one month later. Variation margin requirements will be fully phased in on 1 March 2017 when variation margin is required to be exchanged by a large number of both financial and non-financial counterparties.
For our full range of briefings on the effect of the Margin Rules, as well as a "What you need to know" guide, please see our EMIR Portal.
