Securitization swaps and EMIR

The ESAs’ two final reports on the amendments to EMIR as regards derivatives (both dated 12th December, one concerns the clearing obligation and the other concerning the margining obligation) contain draft RTS which are substantially the same as the drafts in the corresponding two May consultation papers (as to which see FinBrief 14th May 2018). Article 42 of the Securitisation Regulation amends EMIR with a view to STS securitizations and covered bonds being equally exempt from the clearing and collateralisation requirements. Readers will remember that there had been an alarming suggestion that SSPEs should be reclassified (by the EMIR Refit) as Financial Counterparties, and if so this would have been a big issue. Assuming this has indeed gone away, as we understand it has (the EMIR Refit in currently in discussion but the EP version has excluded it), with the result that SSPEs will remain as NFCs, this becomes relevant only in the unlikely case that the SSPE is NFC+. Consequently, these RTS should have limited impact. Both reports still refer to the possibility that the original EMIR Refit reclassification proposal could be adopted, presumably since it has not yet been formally canned.