EU Watchdogs Propose Bilateral Margin Amendments for Sub-€8B Firms
Europe’s top financial watchdogs want to make life easier for smaller players in the derivatives market. On August 3, 2026, the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority — collectively known as the European Supervisory Authorities, or ESAs — released a final report proposing bilateral margin amendments that would loosen initial margin rules for counterparties sitting below a €8 billion threshold set under the European Market Infrastructure Regulation, better known as EMIR.
Key takeaways
- EBA, EIOPA and ESMA published a final report on August 3, 2026 proposing changes to bilateral margin requirements under EMIR.
- The proposal targets counterparties below the €8 billion initial margin threshold, easing their obligations for both new and existing OTC derivative contracts.
- Currently these smaller counterparties are exempt only for new contracts but must still post margin on existing ones — the amendment would remove that distinction entirely.
- The draft Regulatory Technical Standards have been sent to the European Commission, with the European Parliament and Council still to review them before any publication in the EU Official Journal.
- The ESAs say the move responds to industry requests and aims to reduce regulatory burden while aligning EU practice with other jurisdictions.
What the Proposed Bilateral Margin Amendments Actually Change
The core of this proposal is straightforward: it would let smaller derivatives counterparties stop posting initial margin altogether, instead of just for new trades. That’s a meaningful shift from the current setup, and it directly affects how firms below the EMIR threshold manage collateral on their books.
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