UK: PRA and FCA policy statement on margin for non-centrally cleared derivatives

Why should I read this?

After considering responses to PRA and FCA consultation paper CP5/25 “Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251”, the PRA and FCA have published a joint policy statement, PS23/25 “Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251”.

The PS gives effect to the proposals set out in the CP by:

• implementing an indefinite exemption for single-stock equity options and index options from the UK bilateral margining requirements
• removing the obligation to exchange Initial Margin (IM) on outstanding legacy contracts if a firm subsequently falls below the in-scope thresholds
• permitting UK firms to use another jurisdiction’s threshold assessment calculation periods and entry into scope dates to determine whether those transactions are subject to certain IM requirements, when transacting with a counterparty subject to the margin requirements in that jurisdiction

Following the consultation the PRA and FCA have made only minor changes to the proposals in the CP to ensure that the drafting within the provisions and between the PRA and FCA instruments are consistent.

Scope of the policy statement

The PS applies to:

• PRA-authorised banks, insurers, building societies and PRA-designated investment firms subject to margin requirements under the European Market Infrastructure Regulation (UK EMIR)
• all FCA solo-regulated entities and non-financial counterparties in scope of the margin requirements under UK EMIR

It does not apply to:

• UK counterparties subject to margin requirements in the UK and in a third country
• non-UK counterparties indirectly caught by the margin rules of another jurisdiction

Next steps

The amendments to BTS 2016/2251 became effective on 27 November 2025.

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