CP25/5: Margin requirements for non-centrally cleared derivatives

Read CP25/5[1] 

We are consulting on 3 proposals to introduce:

• An indefinite exemption for single stock equity options and index options from the UK’s bilateral margining requirements, from 4 January 2026.
• Amendments for legacy contracts for counterparties that fall under the Average Aggregate Notional Amount (AANA) threshold.
• Amendments to allow firms to align dates related to the AANA calculation with other jurisdictions.

Why are we consulting

We want to understand the impact of our proposals on firms that engage in over-the-counter (OTC) derivatives.  

Who this is for  

The publication is relevant to PRA-authorised banks, building societies and PRA-designated investment firms in scope of the margin requirements under the European Market Infrastructure Regulation (UK EMIR).

It is also relevant to all FCA solo-regulated entities and non-financial counterparties in scope of the margin requirements under UK EMIR.  

How to respond

We welcome responses to this consultation by 27 June 2025.

If you’re a PRA-regulated firm, email comments or enquiries to: [email protected].

FCA-regulated firms should email [email protected].  

Other respondents should submit responses to both authorities.

Next steps  

We plan to publish a Policy Statement and amended BTS in H2 2025.

Our proposed exemption for equity and index options would come into force when the current temporary exemption expires on 4 January 2026.

Background  

Under UK EMIR, firms are required to exchange initial and variation margin on non-centrally cleared OTC derivatives.  

Single-stock equity options and index options are exempted from these requirements until 4 January 2026.  

In July 2023, we consulted on extending the existing temporary exemptions from 4 January 2024 until 4 January 2026 so the PRA and FCA could undertake deeper analysis to develop a permanent UK framework for these products.