General in European Union

Key dates

2026-08-03

ESAs publish final report and draft RTS proposing amendments to Delegated Regulation (EU) 2016/2251 bilateral margin requirements

Suggested considerations

• Compliance teams may wish to review current EMIR margin frameworks and inventories of uncleared OTC derivatives to identify portfolios and counterparties that are below the €8 billion initial margin threshold and could be affected by the proposed phase-out of initial margin exchange.
• Risk and collateral management functions should consider assessing the operational processes, documentation and systems currently used to calculate, call and exchange initial margin on legacy uncleared OTC derivative contracts, to understand the potential impact of a removal of these obligations on collateral flows and counterparty risk management.
• Legal and documentation teams may wish to map existing credit support annexes (CSAs) and collateral agreements to EMIR margin requirements, evaluating whether standard terms referencing Delegated Regulation (EU) 2016/2251 would need amendment if the RTS are endorsed and the obligation to exchange initial margin for below-threshold portfolios is removed.
• Regulatory affairs and policy teams should consider monitoring the European Commission’s endorsement process and subsequent scrutiny by the European Parliament and Council, tracking any changes to the draft RTS text that could affect scope, thresholds or transitional arrangements.
• Firms subject to EMIR in multiple jurisdictions may wish to compare the proposed EU treatment of below-threshold initial margin portfolios with requirements in other key jurisdictions (e.g. US, UK) to ensure consistent cross-border collateral and margin policies and avoid regulatory arbitrage or misalignment.
• Compliance teams may wish to prepare briefing materials for senior management and boards outlining the anticipated simplification and burden reduction, alongside any residual risks or supervisory expectations that could accompany the phase-out of initial margin for below-threshold counterparties.

What changed

Under the current EU bilateral margin framework in Delegated Regulation (EU) 2016/2251, counterparties with an aggregate average notional amount of non-centrally cleared derivatives below the €8 billion initial margin threshold specified in Regulation (EU) No 648/2012 (EMIR) are exempt from exchanging initial margin on new uncleared OTC derivative contracts, but must continue to exchange initial margin on existing contracts.