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Version date: 2 June 2016 - onwards

OTC Question 24: Categories of counterparties [last update 2 June 2016]

Article 2 of RTS on IRS in G4 currencies

Article 2 of Regulation (EU) 2015/2205 on the clearing obligation: Categories of counterparties

The clearing obligation (in relation to the first Regulation on the clearing obligation [Commission Delegated Regulation (EU) 2015/2205 of 6 August 2015, OJ L 314, 1.12.2015, p. 13.]) takes effect on different dates depending on the classification of the counterparties to the OTC derivative transactions. When should counterparties have completed the process of (1) determining the category of counterparty to which they belong and (2) communicating this information to their OTC derivatives counterparties? What happens if a counterparty does not undergo the above process by that time?

OTC Answer 24

The first Delegated Regulation on the clearing obligation entered into force on 21 December 2015, therefore the obligations detailed in it apply to all concerned entities, in accordance with Article 4 of EMIR. The phase-in and the different frontloading start dates of this Regulation were introduced to provide sufficient time for counterparties to know to which category they and their own counterparties belong, and to pre-pare for the clearing of their relevant OTC derivative contracts.

Categories 1 and 4

CCPs have published the list of counterparties classified in Category 1 (see Section 1.3 of the Public Register on the Clearing Obligation). It is therefore assumed that counterparties in Category 1 have completed their self-classification and made this information available to their counterparties. In addition, for Category 1 counterparties, frontloading started to apply on 21 February 2016.