Response to joint Consultation on draft RTS on risk-mitigation techniques for OTC-derivative contracts not cleared by a CCP

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Question 2. Are there particular aspects, for instance of an operational nature, that are not addressed in an appropriate manner? If yes, please provide the rationale for the concerns and potential solutions.

To prevent the cost that would arise for EEA NFC – which are considered to be third country NFC- in the transition period towards full EMIR implementation in the EEA we suggest to amend Article 2 GEN 4 (b) as follows: : (b) where they relate to transactions entered into with non-financial counterparties other than those referred to in Article 10 of Regulation (EU) No 648/2012, including for the avoidance of doubt those counterparties established with the EEA which would be NFC- if they were established in the EU, they may agree not to exchange initial and variation margin;”
We would also suggest the addition of appropriate clarifications on page 7 paragraph 3 of the "Counterparties’ risk management procedures required for compliance with Article 11(3) of Regulation (EU) No 648/2012" chapter of the consultation document which represents interpretation guidelines.
"The RTS impose an obligation on EU entities to collect margin in accordance with the prescribed procedures, regardless of whether they are facing EU or non-EU entities. EU entities would have to collect margin from all third-country entities with the exception of EEA entities below the threshold, unless explicitly exempted by the EMIR or under the EUR 8 billion threshold, even from those that would be classified as non-financial entities below the threshold if they were established in the EU or the EEA.""

Question 4. In respect of the use of a counterparty IRB model, are the counterparties confident that they will be able to access sufficient information to ensure appropriate transparency and to allow them to demonstrate an adequate understanding to their supervisory authority?

no comment

Question 6. How will market participants be able to ensure the fulfilment of all the conditions for the reuse of initial margins as required in the BCBS-IOSCO framework? Can the respondents identify which companies in the EU would require reuse or re-hypothecation of collateral as an essential component of their business models?

no comment

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Energy Norway