The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019

Transitional and final provisions U.K.

59.—(1) At the beginning of Title 9 before Article 85 insert—

“Article 84a U.K. Regulations

1.   Any power to make regulations conferred on the Treasury by this Regulation is exercisable by statutory instrument.

2.   Any power to make regulations under this Regulation includes power to make:

(a) different provision for different purposes;

(b) consequential, supplementary, incidental, transitional, transitory or saving provision.

3.   A statutory instrument containing regulations under this Regulation is subject to annulment in pursuance of a resolution of either House of Parliament.”.

(2) Omit Articles 85 to 87.

(3) In Article 88—

(a) in paragraph 1—

(i) for “ESMA shall” substitute “ The Bank of England and the FCA must each, where appropriate, ”;

(ii) in paragraphs (c), (e) and (f), for “Union” wherever it appears substitute “ United Kingdom ”;

(b) omit paragraph 2;

(c) in paragraph 3, for “All websites” substitute “ The websites ”.

(4) In Article 89—

(a) omit paragraphs 3 to 5;

(b) for paragraph 5a substitute—

“5A.   Until 15 December [F1 2021] or until a decision is made under Article 25 on the recognition of a CCP, whichever is earlier, that CCP shall apply the treatment specified in the second sub-paragraph of this paragraph.

Until the deadline defined in the first sub-paragraph of this paragraph, and subject to the third sub-paragraph of this paragraph, where the CCP neither has a default fund nor has in place a binding arrangement with its clearing members that allows it to use all or part of the initial margin received from its clearing members as if they were pre-funded contributions, the information it is to report in accordance with paragraph 1 of Article 50c shall include the total amount of initial margin it has received from its clearing members.

The Treasury may by regulations extend the deadline referred to in the first sub-paragraph by 12 months.”;

(c) omit paragraphs 6 to 9.

(5) After Article 89 insert—

“Article 89a U.K. Further transitional provision

1.   Until 3 January 2021:

(a) the clearing obligation set out in Article 4 and the risk mitigation procedures set out in paragraph 3 of Article 11 do not apply to C6 energy derivative contracts entered into by non-financial counterparties that meet the conditions in paragraph 1 of Article 10 of this Regulation or by non-financial counterparties that are authorised for the first time as investment firms on or after 3 January 2018; and

(b) such C6 energy derivative contracts are not considered to be OTC derivative contracts for the purposes of the clearing threshold set out in Article 10.

C6 energy derivative contracts benefiting from the transitional regime set out in point (a) shall be subject to all other requirements laid down in this Regulation.

2.   The FCA shall determine whether paragraph 1 applies to the contract concerned. The FCA shall publish on its website a list of those C6 energy derivative contracts to which that paragraph does apply.

3.   In this Article:

“C6 energy derivative contracts” means options, futures, swaps, and any other derivative contracts mentioned in paragraph 6 of Part 1 of Schedule 2 to the Regulated Activities Order relating to coal or oil that are traded on a UK OTF and must be physically settled;

“investment firms” means investment firms within point (a) of point (8) of Article 2;

“UK OTF” has the meaning given in Article 2(1)(13A) of the MIFIR.”.

(6) Omit Articles 90 and 91.

Textual Amendments

F1 Word in reg. 59(4)(b) substituted (31.12.2020 immediately before IP completion day) by The Securities Financing Transactions, Securitisation and Miscellaneous Amendments (EU Exit) Regulations 2020 (S.I. 2020/1385), regs. 1(4), 52(5)

Commencement Information

I1 Reg. 59 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(1)