ESMA Q&A 2936 — Q&A — AAR 85% exemption [Answer Published]

AAR 85% exemption

Question

Should the “one-half” rule set-out under Article 7a(4), subparagraph 5 of EMIR be applied at the level of the classes of derivatives, or across all classes of derivatives?

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Answer

ESMA Q&A 2518, prepared by the European Commission, provides further details on how the calculation of the exemption under Article 7a(4) fifth subparagraph, should be assessed.

The Q&A does not explicitly provide for the calculation to be performed at class level. In particular, the reference in the Q&A to “all subcategories taken together”, without specifically mentioning that it would be at “class level”, should be read as indicating that the condition set out in the fifth subparagraph of Article 7a(4) of EMIR should be assessed on an aggregated basis, all classes combined.

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Source: ESMA original document