UK EMIR Update: Intragroup Exemption Consultations And Additional Q&As

On 5 November 2025, HM Treasury (HMT) published a draft statutory instrument, the Over-the Counter-Derivatives (Intragroup Transactions) Regulations 2026 (draft SI), together with a policy note, and the UK Financial Conduct Authority (FCA) published a consultation paper (CP25/30), each proposing significant reforms to the UKEuropean Market Infrastructure Regulation(EMIR) intragroup exemption framework for clearing and bilateral margin.

These developments follow the FCA and Bank of England's (BoE) finalisation on 31 October 2025 of technical EMIR reporting questions and answers (Q&As) addressing derivative reporting requirements.

For further information on recent developments to EMIR reporting requirements, please see our recent article available here.

HMT's Proposals

If implemented, HMT's draft SI could fundamentally reshape the intragroup exemptions under EMIR related to clearing and bilateral margin. Notably, the draft SI would decouple the Article 3 intragroup transaction from Article 13 equivalence determinations, allowing transactions meeting the remaining Article 3 criteria to qualify as intragroup transactions regardless ofwhether the intragroup counterparty is located in a jurisdiction that has been declared equivalent under Article 13 of UK EMIR. Decoupling intragroup eligibility from Article 13 equivalence would materially expand the availability of non‑temporary exemptions from the clearing obligation and bilateral margin requirements, as described below.

The proposed reforms replace the current application-based approach with a 30-calendar-day FCA non-objection notification process for UK-third country transactions. Under Articles 4 (clearing) and 11 (margin), UK counterparties may use exemptions once this period expires or upon earlier FCA confirmation of non-objection, provided they demonstrate centralised risk management and absence of practical or legal impediments to fund transfers.

Transitional provisions would ensure firms currently benefiting from the Temporary Intragroup Exemption Regime (TIGER) which permits reliance upon the exemptions from clearing and bilateral margin despite the lack of an equivalence determination can continue to operate without reapplication, subject to certain conditions. However, Credit Valuation Adjustment (CVA) capital requirements remain outside this framework. The UK government intends that intragroup CVA exemptions will be administered solely through the Prudential Regulation Authority's (PRA) Basel 3.1 framework from 1 January 2027, with necessary alignment to be reflected in the final statutory instrument.

Comments on the draft SI are requested by 16 January 2026. The UK government expects to lay the draft SI before Parliament in the first half of 2026, and for the new framework to come into force before TIGER expires on 31 December 2026. It also intends to prioritise its review of the remainder of Title II to EMIR.

FCA's Implementation and Simplification

In CP25/30, the FCA proposes amendments to its Binding Technical Standards (BTS) on the intragroup exemption regime under EMIR, implementing HMT's reforms and introducing additional simplifications.

The FCA propose to align clearing and margin processes to the new 30-day notification framework while substantially reducing documentation requirements for margin exemptions. Firms would submit core information evidencing group consolidation, centralised risk controls, and risk management procedures.

To improve navigation, all procedural requirements for margin exemptions would be consolidated into BTS 2016/2251, eliminating current fragmentation. This includes deleting Article 18 of BTS 2013/149 and removing public disclosure requirements under Article 20. The FCA would also revoke outdated EU EMIR Q&A material while retaining relevant guidance aligned with the new framework.

CP25/30 closes on 16 January 2026. The FCA intends to publish a policy statement and final rules once HMT's draft SI is finalised in 2026 and for the new rules to come into force before TIGER expires on 31 December 2026.

Technical Reporting Clarifications: Finalisation of Additional Q&As

Separately, the FCA and BoE have finalised two additional Q&As addressing derivative reporting requirements under EMIR. These have been appended to the relevant sections of the Q&As.

Q&A 4.14 has been updated to include an additional scenario beyond those in the draft Q&As and confirmed the creation of an additional technicalInternational Securities Identification Number(ISIN) for use in that scenario. The guidance reiterates that technical ISINs may only be used to populate specified underlying‑related fields where no standard ISIN exists and must not be used as the product ISIN. This should help firms address edge cases such as certain third‑country listings, listed futures without ISINs, and derivatives referencing pre-initial public offering single stock equities.

Q&A 11.7 has been refined to clarify EMIR reporting of "FX swaps". Where FX swaps are concluded as two contracts negotiated together (near and far legs), reporting occurs through two separate reports with the relevant package transaction fields populated. For FX swaps concluded as a single contract, reporting takes place through a single report.The Q&A includes a table that helpfully illustrates reporting expectations, which we have restated below.

The draft SI, policy note, CP25/30, and the Q&As are availablehere,here,here, andhere, respectively.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.