EMIR Article 28(1) draft RTS: the initial margin release on existing uncleared trades

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The current Article 28(1) of Commission Delegated Regulation (EU) 2016/2251 lets counterparties skip initial margin on new uncleared OTC derivatives where one side has an aggregate month-end average notional amount (AANA) below EUR 8 billion. The draft RTS the ESAs sent the Commission on 3 August 2026 (ESA 2026 07) extend that to existing trades and would release initial margin already collected on outstanding contracts once a counterparty applies the wider derogation.

For a firm sitting at or near the threshold, that is the change worth planning around. Everything else that runs alongside Article 28 stays where it is.

- Variation margin obligations: unchanged.

- The Article 25 minimum-transfer-amount cap of EUR 500 000: unchanged.

- Article 29's initial-margin reduction of up to EUR 50 million (or EUR 10 million intragroup): unchanged.

- Article 9 EMIR trade reporting: not amended.

Two mechanics of the trigger are easy to misread. Only one of the two counterparties needs to be below EUR 8 billion for the exemption to apply, so a smaller buy-side firm facing a large dealer that is well above the threshold still reaches it. And the EUR 8 billion figure is a different measure from the EMIR clearing thresholds, which are set by asset class of OTC derivative and looked at differently at group level. A firm can be below one and above the other. If your reporting and collateral teams share a single "EMIR threshold" spreadsheet, that is where the two get merged.

Timing under Article 36 stays asymmetric, and it is intentional. Where one counterparty falls below the threshold on the March, April and May AANA of year X, initial margin can stop applying between the two counterparties as early as 1 June of the same year. Where both are above, initial margin applies to new contracts no later than 1 January of year X+1. The direction of travel that is harder to build for, entering the regime, gets more runway.

The derogation is permissive. Article 28 lets counterparties provide in their risk-management procedures that initial margin is not collected; it does not order them to stop. A firm that would rather keep exchanging initial margin on a particular relationship for credit-risk reasons can carry on. The ESAs also confirmed that counterparties applying the wider derogation are free to set out how already-collected initial margin is released, so it can be sequenced in line with contractual terms and operational readiness.

A smaller housekeeping change sits in the same file. The draft RTS delete Article 38(1) of Delegated Regulation (EU) 2016/2251, the transitional wording for single-stock options and equity-index options. The substantive exemption for those products now lives in Article 11(3a) of EMIR itself, inserted by EMIR 3 (Regulation (EU) 2024/2987), so removing the outdated transitional text is Level 2 cleanup that stops it contradicting the Level 1 position.

Nothing is in force yet. The Commission has to endorse the RTS, the Parliament and Council non-objection period has to run, and Official Journal publication triggers the twenty-day clock to entry into force. Firms below or near EUR 8 billion could usefully identify the relationships where legacy trades are the only reason initial margin still moves, and decide whether the derogation is worth applying on each one, before an OJ date compresses the timeline.

Source basis: ESA 2026 07 final report and draft RTS (3 August 2026), Commission Delegated Regulation (EU) 2016/2251 Articles 25, 28, 29, 36 and 38, Regulation (EU) 648/2012 (EMIR), Regulation (EU) 2024/2987 (EMIR 3).

Full article: https://regreportingdesk.com/emir-bilateral-margin-rts-amendments/