Welcome to your weekly update from the A&O Shearman pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions.
Government confirms continuation of clearing exemption
Pension schemes are currently exempt from clearing requirements for over-the-counter derivatives under UK EMIR. This exemption lasts until June 18, 2025 (note: this relates to the UK clearing exemption only; the similar EU exemption for European pension scheme arrangements has already ended).
Following a call for evidence, the government has now confirmed that it will take forward secondary legislation to ensure that the exemption does not expire as currently scheduled, and to remove any further time limit on the exemption. Responses to the call for evidence suggested that mandatory clearing would require pension schemes and asset managers to increase their cash holdings, reducing the ability to invest in illiquid assets, and that removing the exemption could make market stress events worse by increasing liquidity pressures.
Read the response on the pension fund clearing exemption.
[View source.]
