BoE consults on exempting post-trade risk reduction services from clearing obligation

The BoE is consulting on exempting post-trade risk reduction (PTRR) transactions from the clearing obligation.

PTRR providers offer services to counterparties to derivatives transactions, to reduce counterparty, operational and basis risk in derivatives portfolios – common offerings include portfolio compression, portfolio rebalancing and basis risk optimisation. Market participants submit trades from their portfolios to PTRR providers and set parameters for risk reduction. A PTRR exercise is then conducted which can involve amending, terminating or inserting a set of new market-risk neutral transactions.

UK EMIR requires that all eligible over-the-counter derivative contracts are cleared by a central counterparty, but BoE considers that exempting transactions arising from PTRR services would further its financial stability objective by reducing complexity and increasing efficiency in these services.

The BoE envisions that this change will unlock resources otherwise directed toward risk management.

The consultation closes on 11 March 2026.