PS22/16: Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251

Consultation opened
Consultation ended
Policy Statement

This Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) policy statement (PS) provides feedback to responses to FCA Consultation Paper (CP) 22/13 — Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251. It also contains the PRA’s and FCA’s final policy, in the form of amendments to Binding Technical Standards (BTS) 2016/2251.

Read PS22/16

Why we are changing 

The PRA and FCA consulted on amendments to margin requirements for non-centrally cleared derivatives in FCA CP22/13 to address issues previously raised by industry.

Consultation responses were generally supportive of the proposals but proposed some minor amendments. In response to the comments made during the consultation, the PRA and FCA have made some minor changes to the proposals consulted on. These are: 

  1. Extending the eligibility of EEA UCITS as collateral to provide a transitional period for firms to become compliant with the new requirements relating to the treatment of third-country funds as eligible collateral.  
  2. Increasing the fall-back transition period for circumstances where firms come into scope of the margin requirements for the first time, and the rules would otherwise apply immediately.  

Who this is for

The proposals will apply to:

  • PRA-authorised firms that are financial counterparties for the purposes of Article 2 of the European Market Infrastructure Regulation (UK EMIR) 
  • all FCA solo-regulated entities and non-financial counterparties in scope of the margin requirements under UK EMIR

Next steps 

The requirements will be effective on publication of this PS, which is when the final technical standards instrument by the PRA and FCA comes into force. Unless otherwise stated, any remaining references to EU or EU-derived legislation refer to the version of that legislation which forms part of retained EU law. 


Without action, temporary eligibility of EEA UCITS as collateral would expire on 31 December 2022. The PRA and FCA are also aware that the current Binding Technical Standards (BTS) do not provide a transition period for firms who, in certain circumstances, would require an immediate application of the margin requirements.  

In FCA CP22/13 we proposed rules to address these issues to ensure derivative markets continue to operate safely and effectively. The proposals consulted on would result in changes to the UK version of Commission Delegated Regulation (EU) 2016/2251 of 4 October 2016, the regulatory technical standards for risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty (hereafter BTS 2016/2251).  

This BTS supplements Article 11(15) of Regulation (EU) No 648/2012 on over-the-counter (OTC) derivatives, central counterparties, and trade repositories (UK EMIR) (Appendix 1).