COMMISSION DELEGATED REGULATION (EU) 2021/237

of 21 December 2020

amending regulatory technical standards laid down in Delegated Regulations (EU) 2015/2205, (EU) 2016/592 and (EU) 2016/1178 as regards the date at which the clearing obligation takes effect for certain types of contracts

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (1), and in particular Article 5(2) thereof,

Whereas:

(1) Commission Delegated Regulations (EU) 2015/2205 (2), (EU) 2016/592 (3) and (EU) 2016/1178 (4) specify, among others, the effective dates of the clearing obligation for contracts pertaining to the classes of OTC derivatives set out in the Annexes to those Regulations. Those Regulations laid down deferred dates of application of the clearing obligation for OTC derivative contracts concluded between counterparties which are part of the same group and where one counterparty is established in a third country and the other counterparty is established in the Union. Those deferred dates were necessary to ensure that such OTC derivate contracts were not subject to the clearing obligation before the adoption of an implementing act pursuant to Article 13(2) of Regulation (EU) No 648/2012.

(2) Since 2018, no implementing act pursuant to Article 13(2) of Regulation (EU) No 648/2012 has been adopted in relation to the clearing obligation. The application of the clearing obligation for OTC derivative contracts concluded between counterparties which are part of the same group and where one counterparty is established in a third country and the other counterparty is established in the Union has therefore been deferred by Commission Delegated Regulation (EU) 2019/667 (5), either until 21 December 2020 or until the adoption of those implementing acts. Despite the efforts invested to analyse third-country jurisdictions in relation to which any such implementing act may be warranted, no implementing act pursuant to Article 13(2) of Regulation (EU) No 648/2012 has yet been adopted in relation to the clearing obligation. The application of the clearing obligation to those contracts should therefore be further deferred to avoid the unintended detrimental economic impact that the expiry of that exemption would have on Union firms.

(3) The United Kingdom became a third country on 1 February 2020 and Union law will cease to apply to and in the United Kingdom on 31 December 2020. The clearing obligation laid down in Regulation (EU) No 648/2012 does not however take into account the eventuality of a Member State withdrawing from the Union. Delegated Regulations (EU) 2015/2205, (EU) 2016/592 and (EU) 2016/1178 specify the dates from which the clearing obligation is to take effect for contracts pertaining to certain classes of OTC derivatives. In addition, those Regulations provide for different dates depending on the category of counterparty to those contracts. Counterparties cannot predict what the status of a counterparty established in the United Kingdom might become or to what extent that counterparty would be able to continue providing certain services to counterparties established in the Union. The challenges faced by the parties to an OTC derivative contract whose counterparties are established in the United Kingdom are therefore a direct consequence of an event that is beyond their control and may put them at a disadvantage compared to other counterparties in the Union.

(4) To address that situation, counterparties may want to novate the contract by replacing the counterparty established in the United Kingdom with a counterparty in a Member State. If, due to the withdrawal of the United Kingdom from the Union, it is decided to replace the counterparty established in the United Kingdom with a new counterparty established in the Union, the replacement may trigger the clearing obligation if it occurs on or after the date from which the clearing obligation takes effect for that type of contract. As a result, the parties may have to clear that contract in an authorised or recognised CCP. Since centrally cleared contracts are subject to a different collateral regime than non-centrally cleared contracts, the triggering of the clearing obligation could force certain counterparties to discontinue their transactions, leaving certain risks unhedged. In order to ensure the smooth functioning of the market and a level playing field between counterparties established in the Union, counterparties should be able to replace counterparties established in the United Kingdom with counterparties established in a Member State without triggering the clearing obligation.

(5) In addition, counterparties should be given sufficient time to replace their counterparties established in the United Kingdom. The date from which the clearing obligation may be triggered for the novation of those contracts should therefore be deferred.

(6) Regulation (EU) No 648/2012 has been amended by Regulation (EU) 2019/834 of the European Parliament and of the Council (6). Due to that amendment, it is no longer required to clear certain OTC derivative contracts concluded before the clearing obligation takes effect. It is neither any longer required to specify the minimum remaining maturities of the OTC derivative contracts referred to in Article 4 of Regulation (EU) No 648/2012. Therefore, Delegated Regulations (EU) 2015/2205, (EU) 2016/592 and (EU) 2016/1178 should no longer specify minimum remaining maturities.

(7) Delegated Regulations (EU) 2015/2205, (EU) 2016/592 and (EU) 2016/1178 should be amended accordingly.

(8) This Regulation is based on the draft regulatory technical standards submitted to the Commission by the European Securities and Markets Authority.

(9) The amendments to Delegated Regulations (EU) 2015/2205, (EU) 2016/592 and (EU) 2016/1178 are limited adjustments of the existing regulatory framework. Given the limited scope of the amendments and the urgency of the matter, it would be highly disproportionate for ESMA to conduct open public consultations or analyses of the potential related costs and benefits. For the same reasons ESMA has not consulted the Securities and Markets Stakeholder Group established by Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (7) of which it was informed accordingly.

(10) It is necessary to provide market participants legal certainty as quickly as possible so that they can adequately prepare for complying with the requirements under Regulation (EU) No 648/2012, the application of which will be affected by this Regulation, in particular with respect to the requirements for which the current applicable deadline is approaching rapidly. This Regulation should therefore enter into force as a matter of urgency,

HAS ADOPTED THIS REGULATION:

Article 1 Amendments to Delegated Regulation (EU) 2015/2205 Delegated Regulation (EU) 2015/2205 is amended as follows: (1) Article 3 is amended as follows: (a) in paragraph 2, first subparagraph, point (a) is replaced by the following: ‘(a) 30 June 2022 in case no equivalence decision has been adopted pursuant to Article 13(2) of Regulation (EU) No 648/2012 for the purposes of Article 4 of that Regulation covering the OTC derivative contracts set out in the Annex to this Regulation in respect of the relevant third country;’; (b) the following paragraph 3 is added: ‘3. By way of derogation from paragraphs 1 and 2, in respect of contracts pertaining to a class of OTC derivatives set out in the Annex, the clearing obligation shall take effect from 18 February 2022 where the following conditions are fulfilled: (a) the clearing obligation has not been triggered by 18 February 2021; (b) the contracts are novated for the sole purpose of replacing the counterparty established in the United Kingdom with a counterparty established in a Member State.’; (2) Article 4 is deleted.

Article 2 Amendments to Delegated Regulation (EU) 2016/592 Delegated Regulation (EU) 2016/592 is amended as follows: (1) Article 3 is amended as follows: (a) in paragraph 2, first subparagraph, point (a) is replaced by the following: ‘(a) 30 June 2022 in case no equivalence decision has been adopted pursuant to Article 13(2) of Regulation (EU) No 648/2012 for the purposes of Article 4 of that Regulation covering the OTC derivative contracts set out in the Annex to this Regulation in respect of the relevant third country;’; (b) the following paragraph 3 is added: ‘3. By way of derogation from paragraphs 1 and 2, in respect of contracts pertaining to a class of OTC derivatives set out in the Annex, the clearing obligation shall take effect from 18 February 2022 where the following conditions are fulfilled: (a) the clearing obligation has not been triggered by 18 February 2021; (b) the contracts are novated for the sole purpose of replacing the counterparty established in the United Kingdom with a counterparty established in a Member State.’; (2) Article 4 is deleted.

Article 3 Amendments to Delegated Regulation (EU) 2016/1178 Delegated Regulation (EU) 2016/1178 is amended as follows: (1) Article 3 is amended as follows: (a) in paragraph 2, first subparagraph, point (a) is replaced by the following: ‘(a) 30 June 2022 in case no equivalence decision has been adopted pursuant to Article 13(2) of Regulation (EU) No 648/2012 for the purposes of Article 4 of that Regulation covering the OTC derivative contracts set out in the Annex to this Regulation in respect of the relevant third country;’ (b) the following paragraph 3 is added: ‘3. By way of derogation from paragraphs 1 and 2, in respect of contracts pertaining to a class of OTC derivatives set out in the Annex, the clearing obligation shall take effect from 18 February 2022 where the following conditions are fulfilled: (a) the clearing obligation has not been triggered by 18 February 2021; (b) the contracts are novated for the sole purpose of replacing the counterparty established in the United Kingdom with a counterparty established in a Member State.’; (2) Article 4 is deleted.

Article 4 Entry into force This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union. This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 21 December 2020. For the Commission The President Ursula VON DER LEYEN

(1) OJ L 201, 27.7.2012, p. 1.

(2) Commission Delegated Regulation (EU) 2015/2205 of 6 August 2015 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on the clearing obligation (OJ L 314, 1.12.2015, p. 13).

(3) Commission Delegated Regulation (EU) 2016/592 of 1 March 2016 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on the clearing obligation (OJ L 103, 19.4.2016, p. 5).

(4) Commission Delegated Regulation (EU) 2016/1178 of 10 June 2016 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on the clearing obligation (OJ L 195, 20.7.2016, p. 3).

(5) Commission Delegated Regulation (EU) 2019/667 of 19 December 2018 amending Delegated Regulations (EU) 2015/2205, (EU) 2016/592 and (EU) 2016/1178 to extend the dates of deferred application of the clearing obligation for certain OTC derivative contracts (OJ L 113, 29.4.2019, p. 1).

(6) Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories (OJ L 141, 28.5.2019, p. 42).

(7) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).