ESAs propose extending the EMIR equity option exemption

The three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published today the joint draft regulatory technical standards (RTS) under the European Market Infrastructure Regulation (EMIR) where they are proposing a two-year extension to the equity option exemption from bilateral margining, as well as issue a no-action opinion.

Today’s draft RTS provide clarity to market participants on how to handle equity options as from 4 January 2024, the date on which the current temporary exemption is set to expire.  More specifically, the ESAs are proposing to extend the temporary exemption and are issuing a no-action Opinion which includes clarifications on the supervisory expectations.

This interim solution comes in the context of the still ongoing EMIR Review negotiations, which should provide a decision regarding the treatment of equity options with respect to bilateral margining, and follows the letter sent by the ESAs on 13 June 2023 to the European Commission and the co-legislators , highlighting the need to have a clear decision as part of the ongoing EMIR Review.

The ESAs take note of the amendments to EMIR agreed by the European Parliament's Committee on Economic and Monetary Affairs (ECON Committee) on 28 November 2023 and at Coreper on 6 December 2023. These texts introduce specific provisions on equity options, including a permanent exemption.