For those derivatives not centrally cleared EMIR requires bilateral exchange of collateral to mitigate risks. The European Commission has today adopted a new set of rules, which sets out the levels and types of collateral that OTC derivatives counterparties must exchange bilaterally if the transaction is not cleared through a CCP.
The draft RTS under EMIR were submitted jointly by the ESA’s. The European Commission endorsed these standards with certain amendments, in particular concerning the concentration limits for pension scheme arrangements and the timeline for implementation.
The Delegated Regulation adopted by the European Commission is now subject to an objection period by the European Parliament and the Council after which it will be published in the Official Journal. The implementation of the rules will begin one month after the entry into force of the Delegated Regulation. The initial margin (VM) is therefore expected to come into force by mid-January 2017 and the variation margin (VM) beginning of March 2017. LINK