PS23/19: Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251

The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have jointly published a policy statement as regards the margin requirements for non-centrally cleared derivatives. The policy statement follows a corresponding consultation in July 2023 (EventID 22205) in which they sought to extend the temporary exemption from the UK bilateral margining requirement for single-stock equity and index options up to January 4, 2026. The regulators also sought feedback on the continuance of their current approach to refrain from „pre-approval“ requirements for the application of individual initial margining models for other products towards which margin requirements apply.
The policy statement now contains the feedback received by respondents to the consultation and the regulators‘ way forward in this matter. Specifically, respondents strongly agreed with the extension and one commenter even asked for an indefinite extension. Having considered such „indefinite“ extension, the FCA and PRA decided to stick to their proposal and extend the exemption from the UK bilateral margining requirement for single-stock equity and index options up to January 4, 2026. They will also maintain their current approach towards the „pre-approval“ of margining models.
The corresponding legal instrument issued by the FCA in this context is treated in EventID 24493.