Counterparties referred to in Article 11(3) of Regulation (EU) No 648/2012 may continue to apply the risk-management procedures that they have in place at the date of application of this Regulation in respect of non-centrally cleared OTC derivative contracts entered into between 16 August 2012 and the relevant dates of application of this Regulation.
1. Article 4(1)(c) shall, for the specified period, be read as if the reference to “the central government of the United Kingdom or the Bank of England” included a reference to “Member States’ central governments or central banks”.
2. Article 4(1)(d) shall, for the specified period, be read as if the reference to “United Kingdom regional governments or local authorities” included a reference to “Member States’ regional governments or local authorities” and as if the reference to “the United Kingdom” included a reference to “that Member State”.
3. Article 4(1)(e) shall, for the specified period, be read as if the reference to “United Kingdom public sector entities” included a reference to “Member States’ public sector entities” and as if the reference to “the United Kingdom” included a reference to “that Member State”.
4. Article 4(1)(f) shall, for the specified period, be read as if the reference to “United Kingdom regional governments or local authorities” included a reference to “Member States’ regional governments or local authorities”.
5. Article 4(1)(g) shall, for the specified period, be read as if the reference to “United Kingdom public sector entities” included a reference to “Member States’ public sector entities”.
6. For the purposes of Article 6(1)(b) a posting counterparty either:-
(a) established in the EEA; or
(b) established in a third country other than a country in the EEA where the posting counterparty is subject to consolidated supervision which, prior to exit day, has been assessed by an EEA competent authority other than the Prudential Regulation Authority or the Financial Conduct Authority as equivalent to that governed by Union law in accordance with Article 127 of Directive 2013/36/EU,
is, for the specified period, deemed to be established in the United Kingdom.
7. Article 6(1)(c) shall, for a period of one year beginning on exit day, be read as if the reference to “a credit quality assessment issued by a recognised External Credit Assessment Institution (ECAI) as defined in Article 4(98) of Regulation (EU) 575/2013” included a reference to “a credit quality assessment that was issued or endorsed and not withdrawn immediately before exit day by a recognised External Credit Assessment Institution (ECAI) as defined in Article 4(98) of Regulation (EU) 575/2013 (as it had effect immediately before exit day)” and, unless the context otherwise requires, related references in this Regulation to Regulation (EU) 575/2013, “ECAI”, “credit quality assessments”, “credit assessment” and “credit quality steps” shall be read accordingly.
8. Article 8(3) shall, for the specified period, be read as if, in addition to (a) to (c), it included institutions identified as G-SIIs or O-SIIs by EU competent authorities in accordance with Article 131 of Directive 2013/36/EU.
9. A credit institution authorised in accordance with Directive 2013/36/EU is, for the specified period, deemed to fall within Article 19(1)(e)(i).
10. For the specified period, the derogation provided for in Article 23 may also be applied by counterparties to EEA CCPs that are authorised as credit institutions in accordance with Directive 2013/36/EU.
11. For the specified period-that begins on IP completion date and ends on 31 March 20232: references to UK UCITS in this Regulation shall be read as if they included references to EEA UCITS (and in relation to EEA UCITS, the reference to Article 132(3) of Regulation (EU) No 575/2013 in Article 5(1)(c) of this Regulation shall be read as a reference to Article 132(3) of Regulation (EU) No 575/2013 as it had effect immediately before IP completion day).1
111A. For the specified period, references to AIFs managed by AIFMs authorised or registered in accordance with the Alternative Investment Fund Managers Regulations 2013 in Articles 28(3), 29(3) and 39(2) shall be read as if they included references to alternative investment funds managed by alternative investment fund managers authorised or registered in accordance with Directive 2011/61/EU.1
12. In Article 30, the reference to Article 129 of Regulation (EU) 575/2013 shall, for the specified period, be read as a reference to that Article as it had effect immediately before exit day.
13. The specified period is the period that begins on exit day and ends on 31 March 2022.
14. In this Article –
"EEA UCITS" has the meaning it has in section 237(3) of the Financial Services and Markets Act 2000.
11. By way of derogation from Article 2(2), counterparties may provide in their risk-management procedures in relation to non-centrally cleared derivative contracts that for a period of 6 months or until the end of the calendar year, whichever period ends the latest, from the date where, for the first time:
(a) a counterparty becomes subject to the requirements in Article 2(1) of this Regulation to maintain risk-management procedures in respect of such non-centrally cleared derivative contracts, the requirements to calculate and collect margins in accordance with Section 3 of Chapter 1 of this Regulation do not apply to transactions with such counterparty;
(b) a derogation in Articles 23 or 24 of this Regulation no longer applies, the requirements to calculate and collect margins in accordance with Section 3 of Chapter 1 of this Regulation do not apply to transactions entered into with counterparties which have ceased benefiting from the derogations in Articles 23 or 24.
2. By way of derogation from Article 2(2), counterparties may provide in their risk-management procedures in relation to non-centrally cleared derivative contracts that for a period of 12 months from the date the derogation in Article 31 of this Regulation no longer applies, the requirements to calculate and collect margins in accordance with Section 3 of Chapter 1 of this Regulation do not apply to transactions entered into with counterparties which have ceased benefiting from the derogation in Article 31.
3. This Article does not apply to Articles 28, 36 and 38.
Article 9(2), Article 11, Articles 13 to 18, points (c), (d) and (f) of Article 19(1), Article 19(3) and Article 20 shall apply as follows:
from 1 month after 4 January 2017, where both counterparties have, or belong to groups each of which has, an aggregate average notional amount of non-centrally cleared derivatives that is above EUR 3000 billion;
from 1 September 2017, where both counterparties have, or belong to groups each of which has, an aggregate average notional amount of non-centrally cleared derivatives that is above EUR 2250 billion;
from 1 September 2018, where both counterparties have, or belong to groups each of which has, an aggregate average notional amount of non-centrally cleared derivatives that is above EUR 1500 billion;
from 1 September 2019, where both counterparties have, or belong to groups each of which has, an aggregate average notional amount of non-centrally cleared derivatives that is above EUR 750 billion;
from 1 September 20211, where both counterparties have, or belong to groups each of which has, an aggregate average notional amount of non-centrally cleared derivatives that is above EUR 50 billion;1
from 1 September 2022, where both counterparties have, or belong to groups each of which has, an aggregate average notional amount of non-centrally cleared derivatives that is above EUR 8 billion.1
Articles 9(1), 10 and 12, shall apply as follows:
from 1 month after 4 January 2017 for counterparties both of which have, or belong to groups each of which has, an aggregate average notional amount of non-centrally cleared OTC derivatives above EUR 3000 billion;
from 1 March 2017 for other counterparties.
By way of derogation from paragraph 1 in respect of contracts for foreign exchange forwards referred to in point (a) of Article 27, Articles 9(1), 10 and 12 shall apply on 3 January 2018.
For the purposes of Articles 36 and 37, the aggregate average notional amount referred to shall be calculated as the average of the total gross notional amount that meets all of the following conditions:
that are recorded on the last business day of March, April and May of the year referred to in each of the points in Article 36(1);
it includes all the entities of the group;
it includes all the non-centrally cleared OTC derivative contracts of the group;
it includes all the intragroup non-centrally cleared OTC derivative contracts of the group, counting each one of them once.
For the purpose of paragraph 1, UK UCITS and AIFs (as defined in regulation 3 of the Alternative Investment Fund Managers Regulation 2013) managed by AIFMs (as defined in regulation 4 of the Alternative Investment Fund Managers Regulation 2013) authorised or registered in accordance with the Alternative Investment Fund Managers Regulations 2013 shall be considered distinct entities and treated separately, where the following conditions are met:
the funds are distinct segregated pools of assets for the purposes of the fund's insolvency or bankruptcy;
the segregated pools of assets are not collateralised, guaranteed or otherwise financially supported by other investment funds or their managers.
