Intragroup transactions can be exempt “totally or partially” from the requirement related to the exchange of collateral for OTC derivatives contracts not cleared by a CCP. What is the scope of this pa

When making a decision on the exemption from the requirement to exchange collateral, the relevant competent authorities shall assess whether the “the risk-management procedures of the counterparties are adequately sound, robust and consistent with the level of complexity of the derivative transaction.” Competent authorities can conclude that the risk- management procedures of the counterparties are consistent with an exemption from initial margins, but not from variation margins. In this case, as it is foreseen in Article 32(4) of the Commission Delegated Regulation 2016/2251, competent authorities could grant a partial exemption, i.e. an exemption limited to the exchange of initial margins. 1.2. Application process for intragroup transactions between financial counterparties and non-financial counterparties