The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published its final report on the Regulatory Technical Standards (RTS) specifying the conditions under which the active account requirement (AAR) should be met, as mandated under the European Market Infrastructure Regulation (EMIR) 3.
ESMA has streamlined the operational conditions and the stress-testing in response to feedback to its public consultation. Additionally, compared to the initial proposal outlined in the consultation document, the final report includes a simplification of the reporting requirements related to risks and activities, the representativeness obligation and the fulfilment of the operational conditions.
The AAR is a key component of EMIR 3, aimed at enhancing the resilience of the EU clearing landscape. It creates an obligation for EU market participants to maintain an active account at an EU central counterparty (CCP) for certain derivatives, in order to reduce their exposure to important third-country CCPs (Tier 2 CCPs).
During its public consultation ESMA gathered feedback from a wide range of stakeholders including CCPs, clearing members, and other market participants.
Next steps
The RTS will now be submitted to the European Commission (EC) for endorsement, following which it will be subject to scrutiny by the European Parliament and the Council.
