28 September 2022

ESMA: Report on the review of the clearing thresholds under EMIR

Executive Summary

Reasons for publication
Regulation (EU) 2019/834 (referred to as EMIR Refit) introduced a mandate in EMIR for ESMA to periodically review the clearing thresholds (CTs) and update them when necessary, in order to ensure that the CTs remain appropriate. That periodic review should be accompanied by a report.
ESMA conducted a review of the CTs which was described in a discussion paper (DP) published on 21 November 2021 and ran a public consultation until 19 January 2022. Taking into account the feedback received in relation to commodity derivatives, ESMA published a final report1 on 3 June 2022 with a draft EMIR RTS proposing to increase the CT for commodity derivatives. The present report looks into the feedback received from market participants during the public consultation besides what has already been covered in the final report on the CT for commodity derivatives. It also includes updated statistics on the coverage of the CTs with 2021 data and elaborates on different initiatives undertaken by ESMA and the National Competent Authorities (NCAs) in relation to the application of the CTs.

Contents
This report presents the key aspects raised by respondents to the public consultation conducted on the basis of the DP (besides the aspects linked to commodity derivatives which have already been addressed in the final report published in June) as well ESMA’s considerations and initiatives in relation to the CTs. It also includes updated statistics and simulations on the level of coverage in terms of notional and counterparties for certain changes to the levels of the CTs.

Next Steps
Taking into account the feedback received during the public consultation and ESMA’s updated data analysis, ESMA is of the view that the amendments to EMIR proposed in the high-level response2 to the European Commission’s consultation on the targeted review of EMIR and published in April 2022, would address to a large extent many of the points raised by respondents. While the more urgent aspects relating to the CT for commodity derivatives have been handled in the June Final report. For the other asset classes ESMA will thus not advise implementing further changes to the levels of the CTs.
ESMA will continue monitoring the coverage of the CTs, in line with the EMIR mandate to periodically review the CTs, to ensure that they remain well-calibrated. Furthermore, ESMA is aware of the constant changes in particular in the current market circumstances and will monitor the developments on an on-going basis....

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