ESMA have issued this press release and this final report, suggesting that the start of the clearing obligation for “smaller” financial counterparties under EMIR be delayed.

Instruments requiring mandatory clearing via a CCP under EMIR are those where:

• They are specified as one of the instruments to be cleared under a delegated act
• Neither of the counterparties is “NFC-“.

So far, delegated acts have been passed for certain interest rate derivatives and credit derivatives.

The rules started with “Category 1” counterparties, those who are clearing members. The will soon also apply to “Category 2” counterparties, that is financial counterparties, those whose group outstanding month end notional is over 8bn Euro.

The rules for “Category 3” counterparties, those financial counterparties under the 8bn threshold. were to start in June 2017, in sub phases according to the eligible product group they are in (i.e. IRS, Credit). The proposal is to delay the start of the rules for 2 years until June 2019, for all eligible product types.

Category 4 counterparties, i.e. non financial counterparties over the clearing threshold, are currently scheduled to start at the end of 2018.

There are several market participants in energy and commodities in category 4. Those who do not pass the as yet not finalised Ancillary Activity test under MiFID, will need to set up Fiancnail Counteporatries, who would then fall into one of the first three categories.