On November 10, ISDA and seven other trade associations wrote to the European Supervisory Authorities (ESAs) to ask them to provide guidance to national competent authorities (NCAs) to exercise their supervisory powers in relation to the European Market Infrastructure Regulation (EMIR) margin requirements for equity options in a proportionate and risk-based manner between January 4, 2024 and the go-live date for EMIR III. Alternatively, the ESAs should extend the temporary exemption in the EMIR bilateral margin regulatory technical standards beyond the current January 4, 2024 expiry date or until EMIR III takes effect.

It is expected that the European Parliament and Council of the EU will support a permanent exemption for equity options from EMIR bilateral margin requirements.

The EMIR bilateral margin requirements have included a time-limited exemption for equity options since they first entered into force in 2016. This exemption has been extended several times, accompanied by guidance from the ESAs that NCAs should exercise their supervisory powers in a proportionate and risk-based way to bridge gaps between the expiry of previous exemptions and the entry into force of amended bilateral margin rules extending the derogation.