The European Commission has extended by one year the temporary exemption from central clearing for pension schemes under EMIR.
The current exception runs until August 2017 and is due to run until 16 August 2018 after the Commission adopted a Delegated Regulation amending EMIR, the regulation containing the clearing requirement for over-the-counter derivatives, on 20 December.
The Delegated Regulation moves to the Council of the EU and the European Parliament for consideration.
The December decision is the second time the Commission has used its power under EMIR to extend the temporary clearing exemption for pension scheme arrangements (PSAs).
It explained its decision in terms of the difficulty and cost PSAs would incur in sourcing cash for central clearing while central counterparties work to find alternative solutions for pension funds.
“Since PSAs hold neither significant amounts of cash nor highly liquid assets,” the Commission said, “imposing central-clearing requirements on them would require very far-reaching and costly changes to their business model, which could ultimately affect pensioners’ income.”
It also said it would consider permanently freeing them from this obligation and that it would look into this as part of a targeted review of EMIR in early 2017.
In other EU regulatory news, the revised occupational pensions directive, IORP II, will come into force next Wednesday, 12 January.
Member states have two years from this date to transpose the legislation, which was passed by the European Parliament on 24 November.