Clifford Chance

Beyond Brexit: EU vs UK Margin Rules for OTC Derivatives

11 May 2021

EU and UK margin rules for OTC derivatives will remain closely aligned after the end of the Brexit transition period – but some differences will remain.

The EU Regulatory Technical Standards (RTS) on margin were ‘onshored’ in the UK from the end of the Brexit transition period with limited changes to reflect the UK’s status outside the EU. The PRA and FCA are consulting on amendments to align elements of the UK Margin RTS with changes made to the EU Margin RTS following the end of the Brexit transition period. However, the end of the Brexit transition period still means some changes for both EU and UK counterparties under:

• the EU Margin RTS as a result of the UK becoming a third country for the purposes of EU law; and
• the UK Margin RTS as a result of the onshoring amendments, albeit mitigated by transitional relief until 31 March 2022.

The International Swaps and Derivatives Association (ISDA) and Clifford Chance have prepared this briefing highlighting some key changes and differences that will remain between the EU and the UK Margin RTS.

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