Featured Product

    EC Regulation Extends Transitional Periods Under CRR and EMIR

    December 05, 2018

    EC published Implementing Regulation (EU) 2018/1889 on the extension of transitional periods related to own funds requirements for exposures to central counterparties (CCPs), as set out in the Capital Requirements Regulation, or CRR, (575/2013) and the European Market Infrastructure Regulation, or EMIR (648/2012). The fifteen-month periods referred to in Article 497(2) of CRR and in the second subparagraph of Article 89(5a) of EMIR, as most recently extended in Implementing Regulation (EU) 2018/815, are being extended to June 15, 2019, by additional six months. Regulation (EU) 2018/1889 shall enter into force on the third day following that of its publication in the Official Journal of the European Union.

    To avoid disruption to international financial markets and to prevent penalizing institutions by subjecting them to higher own funds requirements during the processes of recognition of existing third-country CCPs, Article 497(2) of CRR established a transitional period during which third-country CCPs with which institutions established in EU clear transactions may be considered qualifying CCPs by those institutions. Article 89(5a) of EMIR requires certain third-country CCPs to report, for a limited period of time, the total amount of initial margin they have received from their clearing members. That transitional period mirrors the one laid down in Article 497(2) of CRR. Both transitional periods were set to expire on June 15, 2014. These transitional periods have most recently been extended until December 15, 2018 Via the Implementing Regulation (EU) 2018/815. Article 497(3) of CRR empowers EC to adopt an implementing act to extend the transitional period for own funds requirements by six months in exceptional circumstances.  That extension should also apply in respect of the time limits laid down in Article 89(5a) of EMIR. 

    Out of the CCPs established in third countries that have already applied for recognition in accordance with Article 25 of EMIR, ESMA has recognized 32 CCPs. The remaining third-country CCPs are awaiting recognition and their recognition process will not be completed by December 15, 2018. The need to avoid disruption to markets outside of the Union, which led to the previous extensions of the transitional period laid down in Article 497(2) of CRR, would therefore remain after the expiry of the extension of the transitional period set out in the Implementing Regulation (EU) 2018/815. A further extension of the transitional period should enable institutions established in the Union (or their subsidiaries established outside the Union) to avoid significant increase in the own funds requirements due to the lack of completion of the recognition process for CCPs, which provide, in a viable and accessible way, the type of clearing services that institutions established in the Union (or their subsidiaries established outside the Union) require. An additional six-month extension of the transitional periods is, therefore, appropriate.

     

    Related Links 

    Effective Date: December 08, 2018

    Keywords: Europe, EU, Banking, Securities, CRR, EMIR, Transitional Period, CCP Exposures, Own Funds Requirements, EC

    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629