On Tuesday 20 December, the European Commission proposed extending by one year – from mid-August 2017 to mid-August 2018 – the exemption to the EMIR regulation (5648/2012) enjoyed by occupational pension schemes since 2012. The regulation requires investors to clear their transactions in derivative financial products traded over the counter (OTC derivatives) in central counterparties.
Had this derogation not been extended, pension funds would have been obliged to hold large quantities of cash or highly liquid assets by way of guarantee. "Imposing central clearing requirements on (these financial players) would require very far-reaching and costly changes to their business model, which could ultimately affect pensioners' income", the Commission stresses in a press release.
The Commission reiterates that central counterparties must offer technical solutions allowing pension schemes to provide guarantees in forms other than cash. It states that the targeted revision of the EMIR regulation for 2017 will be the right time to look again at the issue. A solution is required, as this third extension of the derogation is the last one laid down in the EMIR regulation (three years + two years + one year). (Original version in French by Mathieu Bion)