Publication of EMIR REFIT and FRANDT criteria (*)
Delegated Regulation 2021/1456, published on 8 September 2021 in the EU OJ and coming into force the following day, put an end to an ambiguous situation for the industry.
The official text confirms the scope of application (the provision of clearing services in the Union when they relate to OTC derivative contracts subject to the clearing obligation). Therefore, this does not include equity cash clearing, listed derivatives or contracts that are voluntarily cleared. The fact that the obligation applies when the service is provided in the Union answers the question of territoriality.
The Annex to the Delegated Act details the obligations to be fulfilled to provide a “FRANDT*” clearing service. The onboarding process (transparency), risk control assessment (fair and non-discriminatory) and billing (reasonable) are covered. On the other hand, it sets the notice period to stop the service at 6 months (except in special cases).
Finally, the text gives stakeholders time to comply and sets the entry into force for 9 March 2022.
(*) fair, reasonable, non-discriminatory and transparent commercial terms