ESMA clears the way for UK pension scheme exemptions
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ESMA clears the way for UK pension scheme exemptions 05 February 2016Brussels Reporter: Mark Dugdale
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The European Securities and Markets Authority (ESMA) has backed plans to exempt 16 UK pension schemes from central clearing obligations.
ESMA issued opinions in support of the transitional exemptions on 2 February, after receiving requests to do so from the UK Financial Conduct Authority (FCA), which cannot move ahead without the EU authority’s backing.
The 16 unnamed pension schemes, which range from pooled funds to life insurance providers, would be exempted from the requirement to centrally clear over-the-counter derivatives under the European Market Infrastructure Regulation, should the UK FCA confirm the decisions within 10 working days.
ESMA gave its backing to the exemptions after finding that the pension schemes would find it difficult to meet variation margin requirements due to limited cash holdings and the risk of inefficiencies as a result of converting assets into cash.
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