PensionsEurope has responded to a European Commission’s consultation on the review of the European Market Infrastructure Regulation (EMIR). Here you can read our paper which explains that pension funds need a stable financial system. PensionsEurope sees the benefits of EMIR, however it is crucial that pension funds get an appropriate treatment. A robust solution needs to be found for the cash variation margin (VM) issue. Otherwise, applying EMIR towards pension funds will not increase the stability of the financial system, but will affect long term investments by pension funds and hence will increase the costs of pensions.
PensionsEurope calls on the Commission to maintain the exemption for pension funds from the central clearing obligation in place until a suitable clearing solution has been found. The market has not yet developed a practicable and efficient process for central clearing of pension scheme’s OTC derivative transactions. In addition to this, the existing exemption has not delivered a relief from mandatory clearing for three to six years as originally envisaged, as the clearing obligation is still not effective.