EMIR: EU Commission adopts RTS on risk-mitigation techniques for OTC derivative contracts

The Regulation 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 margin collected will protect the non-defaulting counterparty against resulting losses should one counterparty to the transaction default. The Commission has endorsed the standards with amendments, in particular concerning the concentration limits for pension scheme arrangements and the timeline for implementation.

The Regulation is now subject to a three month objection period by the EU Parliament and the Council, and will enter into force on the twentieth day following that of its publication in the Official Journal.