Global Markets Advisory Committee: EMIR 2.2 & 

ESMA’s Related Draft Regulatory Requirements

September 2019
• Following the initial proposal to amend the supervisory framework for non-E.U. CCPs in the summer of 

2017, political agreement was reached in March 2019 (i.e., “EMIR 2.2”)

- EMIR 2.2 is expected to be published in the Official Journal in 2019Q4 

EMIR 2.2 materially changes the regulatory framework for non-E.U. CCPs, particularly where those 

CCPs are deemed systemically important to the EU 

• Regulatory requirements need to be adopted by the European Commission (“EC”) covering:

- Tiering: Determining whether a non-E.U. CCP is systemically important to the stability of the E.U. or one of its Member States

- Comparable Compliance: If determined to be systemically important, how the non-E.U. CCP is able to comply with EMIR by 

complying with comparable home country regulatory requirements 

- Fees: Fees for non-E.U. CCPs to cover the expansion of the E.U.’s regulatory oversight 

• Following a request from the EC for advice, the European Securities and Markets Authority (“ESMA”) 

publicly consulted on draft standards

- ESMA’s consultation closed in July 2019

ESMA’s Consultation on EMIR 2.2 Draft Regulatory Requirements 
The European Commission via EMIR 2.2 has created a framework for evaluating whether a non-E.U. CCP is 

“systemically important or likely to become systemically important for the financial stability of the E.U. or of one 

or more of its member states.”

• Tier 1 CCP versus Tier 2 CCP

- Tier 1: ESMA has determined that the non-E.U. CCP is not systemically important or likely to become systemically important 

- Tier 2: ESMA has determined that the non-E.U. CCP is systemically important or likely to become systemically important

• Consequences of Tiering

- A non-E.U. CCP must be assessed by ESMA as Tier 1 or Tier 2 in order to offer its clearing services to E.U.-based clearing members and their clients

- If a non-E.U. CCP is deemed as Tier 2, the non-E.U. CCP will only be permitted to provide its clearing services to E.U.-based clearing members and clients if 

it meets additional conditions

• Criteria for Tiering

- EMIR 2.2 requires ESMA to take into account the following criteria in its determination of a non-E.U. CCP’s systemic importance in Europe:

A. The nature, size and complexity of the non-E.U. CCPs business in the Union, and outside the E.U. to the extent its business may have a systemic impact 

on the E.U. or on one or more of its Member States

B. The effects a non-E.U. CCP’s failure or disruption would have on the E.U.

C. A non-E.U. CCP’s clearing membership structure

D. Alternatives for a non-E.U. CCP’s clearing services on financial instruments denominated in E.U. currencies

E. A non-E.U. CCP’s relationships, interdependencies, and other interactions to the extent they would have an impact on the financial stability of the E.U. or 

one of its Member States

Tiering Proposal
ESMA proposes to assess a non-E.U. CCP’s tier by evaluating 14 indicators

Tiering Proposal

The nature, size and complexity 

of the non-E.U. CCPs business in 

the Union

The effects a non-E.U. CCP’s 

failure or disruption would have 

on the E.U.

A non-E.U. CCP’s clearing 

membership structure

Alternatives for a non-E.U. 

CCP’s clearing services on 

financial instruments 

denominated in E.U. currencies

A non-E.U. CCP’s relationships, 

interdependencies, and other 

interactions 

Indicator 1: Assess the non-E.U. CCP’s 

ownership, business, and corporate 

structure

Indicator 2: Assess the financial 

instruments cleared by the non-E.U. CCP 

including: (i) whether they are subject to 

the clearing obligation in the E.U.; (ii) 

whether they are denominated in E.U. 

currencies; and (iii) their complexity, price 

volatility, and average maturity

Indicator 3: Assess the value (e.g., notional 

outstanding) and volume cleared by the 

non-E.U. CCP in aggregate, for E.U. clearing 

members, and for non-E.U. clearing 

members where they clear on behalf of 

E.U. clients and E.U. indirect clients

Indicator 4: Assess the transparency (e.g., 

availability of price information) and 

liquidity of the relevant markets 

Indicator 5: Assess the risk profile of the 

non-E.U. CCP

Indicator 6: Assess the non-E.U. CCP’s 

margins, default fund contributions, and 

eligible collateral, including variation 

margin flows and initial margin and default 

fund collateral held and required: (i) in 

aggregate; (ii) for E.U. clearing members; 

and (iii) denominated E.U. currencies 

Indicator 7: Assess the non-E.U. CCP’s 

liquidity resources, including the largest 

payment obligations in aggregate and E.U. 

currencies and related liquidity resources, 

as well as the amount of resources 

provided by E.U. entities

Indicator 8: Assess the non-E.U. CCP’s 

settlement and payments, including the use 

of central bank money for settlement and 

distributed ledger technology, as well as 

where payments are made in E.U. 

currencies 

Indicator 9: Assess the framework for 

recovery and resolution of the non-E.U. 

CCP, including available tools and the 

related maximum liability for an individual 

clearing member and all E.U. clearing 

members

Indicator 10: Assess and identify the nonE.U. CCP’s clearing members, in particular 

its E.U. clearing members, E.U. clients, and 

E.U. indirect clients and their share of the 

CCP’s total clearing activity

Indicator 11: Assess the access to the nonE.U. CCP and its clearing services, including 

clearing membership requirements and 

grounds for denying access 

Indicator 12: Assess if there are substitutes 

for the non-E.U. CCP’s clearing services, 

including whether those services are 

offered to E.U. clearing members, E.U. 

clients, and E.U. indirect clients, for a 

trading venue that is authorized (or 

recognized), and for swaps subject to a 

clearing obligation

Indicator 13: Assess the non-E.U. CCP’s 

outsourcing arrangements, including if 

arrangements have been outsourced to 

E.U. entities

Indicator 14: Assess the non-E.U. CCP’s 

links or connections with other financial 

market infrastructures, other financial 

institutions, and the broader financial 

system, including if the CCP clears for an 

E.U. trading venue, has interoperability 

arrangements with an E.U. CCP, and has 

links with E.U. central securities 

depositories or payment systems 
Under ESMA’s proposals, the comparable compliance assessment would be conducted at the CCP level on a 

“requirement-by-requirement” basis by mapping a given non-E.U. requirement to the corresponding EMIR requirement 

The supervisory approach ESMA will take for each non-E.U. CCP once the comparable compliance assessment is 

complete remains unclear

ESMA’s proposals categorize EMIR requirements as “core” or “non-core” requirements

Core Requirements: Non-E.U. requirements can only be considered comparable when they are assessed to always be 

equal or at least as strict or conservative as the corresponding EMIR core requirements and if this is not the case, the 

non-E.U. CCP must adopt the corresponding EMIR requirements as a floor or minimum

Non-Core Requirements: Non-E.U. requirements can be considered comparable when they are similar as the 

corresponding EMIR non-core requirements if they substantially achieve the respective regulatory objectives of the EMIR 

requirements 

• If comparable compliance is difficult to achieve, ESMA would consider whether the requirements achieve the regulatory 

objectives of the corresponding EMIR requirements and “effectively reflect the Union’s interest as a whole”

Comparable Compliance Proposal
The EC will need to finalize these regulatory requirements prior to EMIR 2.2 becoming applicable to non-E.U. 

CCPs

• 2019Q4: EMIR 2.2 is published in the Official Journal – only applicable when related regulatory requirements are 

adopted by the EC

• 2019Q4: ESMA is expected to submit its technical advice to the EC on the related regulatory requirements for EMIR 2.2 

• 2019Q4-2020Q2: The related regulatory requirements per Delegated Act for EMIR 2.2 are finalized by the EC following 

a consultation conducted by the EC (EP and Council have a 3 month period for non-objection)

• 2020Q1-2021Q2: Determinations are made whether non-E.U. CCPs are systemically important to the E.U. 

• Within 18 months the non-EU CCPs designated systemically important must adapt with core EMIR requirements

Next Steps – Anticipated Timeline