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The Council adopted today a mandate to start negotiations with the European Parliament on a review of the European market infrastructure regulation and directive. The review aims to make the EU clearing landscape more attractive and resilient, to support the EU’s open strategic autonomy and to preserve the EU’s financial stability.
The European Market Infrastructure Regulation (EMIR) lays down rules on over-the-counter (OTC) derivatives, central counterparties (CCPs) and trade repositories. The proposed EMIR review contains several legislative measures to improve EU clearing services, notably by streamlining and shortening procedures, improving consistency between rules, strengthening CCP supervision and requiring market participants subject to a clearing obligation to clear a portion of the products, which have been identified by ESMA as of substantial systemic importance, through active accounts at EU CCPs.
The Council ensured that in practice it is feasible for supervisory authorities to apply streamlined supervisory processes, such as authorisation and validation procedures.
It strengthened the role of supervisory frameworks, while ensuring an appropriate division of tasks between national authorities establishing coordination at European level, in particular by establishing a Joint Monitoring Mechanism and providing ESMA with a coordination role in cross-border emergency situations.
The Council set a solid active account requirement (AAR) that will require certain financial and non-financial counterparties to have an account at an EU CCP, which includes operational elements such as the ability to handle the counterparty’s transactions at short notice if need be and activity elements so that the account is effectively used. This is ensured by a number of requirements, which have to be fulfilled by these accounts, including requirements for counterparties above a certain threshold to clear trades in the most relevant sub-categories of derivatives of substantial systemic importance defined in terms of class of derivative, size and maturity.