ISDA Responds to Bank of England on Derivatives Clearing Exemption

ISDA News

Published March 18th, 2026

Detected March 19th, 2026

Summary

ISDA has submitted a response to the Bank of England's consultation regarding an exemption for post-trade risk reduction (PTRR) transactions from the derivatives clearing obligation under EMIR. ISDA supports the proposed principles-based approach and suggests immediate availability of the exemption upon finalization.

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What changed

ISDA has formally responded to the Bank of England's consultation concerning a proposed exemption for post-trade risk reduction (PTRR) transactions from the derivatives clearing obligation under Article 4 of EMIR. The response, submitted on March 11, 2026, expresses support for the Bank of England's principles-based approach to defining PTRR services and eligibility criteria. ISDA's primary recommendation is for the exemption to be made immediately available once the rules are finalized, allowing market participants to benefit from risk reduction without delay.

This action is relevant for financial institutions engaging in derivatives trading and risk management. While this is a consultation response and not a final rule, it indicates a potential shift in regulatory requirements for PTRR transactions. Compliance officers should monitor the Bank of England's final decision on this consultation. If implemented as ISDA suggests, firms could see reduced clearing obligations for certain risk reduction activities, potentially impacting operational costs and risk management strategies.

What to do next

Monitor Bank of England's final decision on the PTRR exemption consultation.
Assess potential impact of PTRR exemption on current derivatives clearing obligations and operational costs.

Source document (simplified)

Infrastructure
Clearing
ISDA Responds to BoE on Clearing Exemption for Post-trade Risk Reduction Transactions

ISDA Responds to BoE on Clearing Exemption for Post-trade Risk Reduction Transactions

On March 11, ISDA submitted a response to the Bank of England’s consultation on a proposed approach to exempting post-trade risk reduction (PTRR) transactions from the derivatives clearing obligation under Article 4 of the European Market Infrastructure Regulation (EMIR).

ISDA welcomes the content of the proposal and appreciates that the Bank of England has taken a principles-based approach to the definition of a PTRR service and to the eligibility criteria to benefit from the exemption from the clearing obligation. ISDA suggests making the exemption immediately available once the rules instrument is finalized, so that market participants can choose to participate in PTRR exercises and benefit from risk reduction across their portfolios without further delay.

Tags:

Bank of England, Clearing, Collateral, EMIR

Documents (1)

ISDA Responds to BoE on Clearing Exemption for Post-trade Risk Reduction Transactions(pdf)

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