On October 22, HM Treasury published the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 (Draft EMIR (Brexit) SI), a draft statutory instrument (SI) relating to the European Market Infrastructure Regulation (EMIR). It also has published a supporting explanatory memorandum.
The purpose of the Draft EMIR (Brexit) SI is to ensure that on-shored aspects of EMIR relating to over-the-counter derivatives, central counterparties (CCPs) and trade repositories continue to operate effectively after the United Kingdom’s withdrawal from the European Union (Brexit) on March 29, 2019 (Exit Day).
The Draft EMIR (Brexit) SI includes provisions designed to:
- ensure that requirements imposed by EMIR continue to apply in the United Kingdom and transfer responsibilities in this regard to UK regulators;
- transfer the power to make third-country regime equivalence decisions from the European Commission to HM Treasury;
- establish a temporary intragroup exemption regime to ensure that intragroup transactions can continue to be exempted from EMIR requirements, where this is the case to date. This regime will last three years and may be extended by HM Treasury in certain circumstances; and
- remove provisions relating to sharing information with other EU authorities and the oversight of central counterparties by regulatory colleges.
The Draft EMIR (Brexit) SI sits alongside the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 and the Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018 (for further details of each, see the October 5 and October 12 editions of Corporate & Financial Weekly Digest, respectively).
HM Treasury will present the Draft EMIR (Brexit) SI to Parliament prior to Exit Day, and the SI will go into effect on Exit Day.
The Draft EMIR (Brexit) SI is available here.
The explanatory memorandum is available here.