OTC Question 13: Status of entities not established in the Union [last update 2 October 2019]
Status of Entities not established in the Union
(a) How should a counterparty determine whether an entity established in a third country would be a financial counterparty above the clearing thresholds (FC+) or below the clearing thresholds (FC-) if it was established in the Union?
(b) How should a counterparty determine whether an entity established in a third country which they believe would be an NFC is an NFC+ or NFC-?
(c) Does a pension scheme established in a third country benefit from the exemption from the clearing obligation provided under EMIR?
(d) Do sovereign wealth funds established in third countries fall within the scope of application of EMIR? If so, do they qualify as financial counterparty or non-financial counterparty?
OTC Answer 13
(a) This needs to be assessed by individual counterparties in cooperation with their third-country counterparties, taking into account the nature of the activities undertaken by the counterparty in question and its positions calculated at the group level. If a third country entitywould be a financial counterparty if it were established in the Union and is part of a group which also includes financial counterparties established in the Union, its FC+ or FC-status should be assumed to be the same as that of the EU FCs. Where there is no EU FC or EU NFC as part of the group, the only way to determine the status of such a third country entity is to calculate its group-level position against the EMIR clearing thresholds.