At the end of February this year, the European Supervisory Authorities gave limited forbearance on the obligation to exchange variation margin. More recently, the mandatory clearing obligation for financial counterparties and alternative investment funds with under €8bn in outstanding derivatives was confirmed to be delayed until June 2019, as recommended by ESMA last year.

In this context, it was hoped that the European Commission’s recent proposals for public consultation (following its mandatory review of the operation of EMIR) would result in a further relaxation of some of the more onerous obligations. Indeed, the Commission’s proposals do contain a great deal that will be welcomed by market participants in reducing burdens, which we detail in a schedule to this note. However, there are also proposals which would impose considerably greater burdens on securitisation special purpose entities, and which would increase obligations for a number of alternative investment funds.