Recital 23

(23) In order to avoid market fragmentation and ensure a level playing field, and acknowledging the fact that in some third-country jurisdictions the exchange of variation and initial margin for single stock options and equity index options is not subject to equivalent margin requirements, the treatment of such products should be exempted from the requirement to have risk-management procedures regarding the timely, accurate and appropriately segregated exchange of collateral, as long as there is insufficient international convergence on their treatment. ESMA, in cooperation with the European Supervisory Authority (European Banking Authority) (EBA) established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council (13) and the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (EIOPA) established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council (14) (known collectively as ‘ESAs’), should monitor regulatory developments in third-country jurisdictions and the development of exposures by counterparties subject to Regulation (EU) No 648/2012 in single stock options and equity index options not cleared by a CCP, and should report to the Commission on the results of such monitoring at least every three years. Where the Commission has received such a report, it should assess whether international developments have led to more convergence in the treatment of single stock options and equity index options and whether the derogation endangers the financial stability of the Union or of one or more of its Member States. In such a case, the Commission should be empowered to revoke the derogation regarding the treatment of single stock options and equity index options. In that way, it can be ensured that appropriate requirements are in place in the Union to mitigate counterparty credit risk in respect of such contracts while avoiding any scope for regulatory arbitrage.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-16 · Text as adopted (Official Journal); later amendments are not incorporated in this text.