ESMA has published a report with draft RTS that would amend the 3 Commission Delegated Regulations on EMIR. ESMA is proposing a limited exemption that would facilitate novation of certain non-centrally cleared OTC derivatives to EU counterparties for a specific time-window in the event of a no-deal Brexit. The proposals would allow novation without triggering the clearing obligation in these limited circumstances and would be open for 12 months following Brexit. Counterparties would also be able to start repapering ahead of the date, making the novation conditional on a no-deal Brexit.
