Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) No 648/2012, (EU) No 575/2013 and (EU) 2017/1131 as regards measures to mitigate excessive exposures to third-country central counterparties and improve the efficiency of Union clearing markets
Date: 2022-12-07
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: capital market, credit institution, financial control, financial instrument, financial legislation, financial supervision, financial transaction, investment company, private-sector liquidity, securities

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 7.12.2022  COM(2022) 697 final 2022/0403 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) No 648/2012, (EU) No 575/2013 and (EU) 2017/1131 as regards measures to mitigate excessive exposures to third-country central counterparties and improve the efficiency of Union clearing markets (Text with EEA relevance) {SEC(2022) 697 final} - {SWD(2022) 697 final} - {SWD(2022) 698 final}  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal  

• 
Regulation (EU) No 648/20121 (the European Market  Infrastructure Regulation or “EMIR”) 
regulates derivatives transactions, including measures to limit their risks through clearing in 
central  counterparties  (CCPs).2  CCPs  take  on  the  risks  faced  by  the  parties  to  a  trade, 
becoming the buyer to every seller and the seller to every buyer. By doing so, they increase 
market  transparency  and  efficiency  and  reduce  the  risks  in  financial  markets,  especially  for 
derivatives.  

EMIR was adopted in the wake of the 2008/2009 financial crisis to promote financial stability 
and to make markets more transparent, more standardised, and thus safer. EMIR requires that 
derivatives  transactions  are  reported  to  ensure  market  transparency  for  regulators  and 
supervisors and that their risks are appropriately mitigated through central clearing at a CCP 
or by exchanging collateral, known as ‘margin’, in bilateral transactions. CCPs, and the risks 
they manage, have grown considerably since the adoption of EMIR. 

In 2017, the Commission published two legislative proposals amending EMIR, both of which 
were  adopted  by  the  co-legislators  in  2019.  EMIR  REFIT3  recalibrated  some  of  the 
requirements  under  EMIR  to  ensure  their  proportionality,  while  ensuring  financial  stability. 
Acknowledging the emerging issues related to the increasing concentration of risks in CCPs, 
in particular third-country CCPs, EMIR 2.24 revised the supervisory framework and set out a 
process  for  assessing  the  systemic  nature  of  third-country  CCPs  by  the  European  Securities 
and  Markets  Authority  (ESMA)  in  cooperation  with  the  European  Systemic  Risk  Board 
(ESRB)  and  the  central  banks  of  issue.  EMIR  is  complemented  by  the  CCP  Recovery  and 
Resolution  Regulation5,  adopted  in  2020,6  to  prepare  for  the  unlikely  –  though  massively 
impactful - event that an EU CCP faces severe financial distress.7  

Whilst  EMIR  has  established  a  robust  framework  for  central  clearing,  certain  areas  of  the 
current supervisory framework have proven overly complex. This limits EU CCPs’ ability to 

1 

2 

3 

4 

5 

6 

7 

Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC 
derivatives, central counterparties and trade repositories, OJ L 201, 27.7.2012. 
See Annex 7 of the accompnaying Impact Assessment for a detailed background on derivatives and how 
CCPs operate within financial markets. 
Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending 
Regulation  (EU)  No  648/2012  as  regards  the  clearing  obligation,  the  suspension  of  the  clearing 
obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not 
cleared  by  a  central  counterparty,  the  registration  and  supervision  of  trade  repositories  and  the 
requirements for trade repositories (Text with EEA relevance.); OJ L 141, 28.5.2019, p. 42–63. 
Regulation  (EU)  2019/2099  of  the  European  Parliament  and  of  the  Council  of  23  October  2019 
amending  Regulation  (EU)  No  648/2012  as  regards  the  procedures  and  authorities  involved  for  the 
authorisation  of  CCPs  and  requirements  for  the  recognition  of  third-country  CCPs;  OJ  L  322, 
12.12.2019, p. 1–44. 
Regulation  (EU)  2021/23  of  the  European  Parliament  and  of  the  Council  of  16  December  2020  on  a 
framework for the recovery and resolution of central counterparties, OJ L 22, 22.1.2021, p. 1–102. 
The Regulation builds on the standards developed by the Financial Stability Board in the aftermath of 
the  financial  crisis.  See  “Key  Attributes  of  Effective  Resolution  Regimes  for  Financial  Institutions”, 
Financial 
2011) 
Board 
http://www.financialstabilityboard.org/publications/r_111104cc.pdf.  Updated  in  October  2014  with 
sector-specific annexes http://www.financialstabilityboard.org/wp-content/uploads/r_141015.pd .  
Regulation  (EU)  2021/23  of  the  European  Parliament  and  of  the  Council  of  16  December  2020  on  a 
framework for the recovery and resolution of central counterparties, OJ L 22, 22.1.2021, p. 1–102.  

(November 

Stability 

EN 

1 

  EN 

                                                 
attract business both within the EU and internationally. The supervisory approval procedures 
for  launching  new  clearing  services  and  activities  by  EU  CCPs,  as  well  as  changes  in  their 
risk  models,  are  in  many  cases  unnecessarily  long  and  burdensome.  The  current  rules  are 
there to ensure the safety and soundness of EU CCPs, but this could be done in many ways 
and the existing processes have been challenged as too slow and, at times, disproportionate in 
light  of  the  envisaged  change.  It  should  not  take  years  for  approving  a  new  product,  and 
changes  to  risk  models  need  to  be  swift  to  reflect  changing  market  and  economic 
circumstances. Delays in approvals increase costs and reduce the attractiveness of EU CCPs, 
and consequently of the EU as a place to do business. The proposal aims at mitigating these 
obstacles in order to foster modern and competitive CCPs in the EU that can attract business. 

EMIR  provides  a  comprehensive  and  robust  prudential  framework  for  CCPs  and  the  newly 
adopted  CCP  Recovery  and  Resolution  Regulation  further  strengthens  the  soundness  of  EU 
CCPs. This proposal aims for the EU to continue to base the evolution of its central clearing 
ecosystem  on  the  strength  of  its  rules  and  supervision.  Robust  and  safe  CCPs  enhance  the 
trust of the financial system and crucially support the liquidity of key markets. A safe, robust 
and  resilient  clearing  ecosystem  is  a  pre-condition  for  it  to  grow  further.  The  EU  central 
clearing ecosystem should enable EU firms to hedge their risks efficiently and safely, while at 
the  same  time  safeguarding  the  wider  financial  stability.  In  this  way,  central  clearing  will 
support the EU economy. This proposal aims to put firms in a better position by being able to 
predict  the  liquidity  needs  associated  with  central  clearing.  A  competitive  and  efficient  EU 
clearing  ecosystem  will  increase  central  clearing  activities,  but  central  clearing  also  entails 
risks  by  centralising  transactions  in  a  few  CCPs  being  financially  systemically  important. 
Hence,  those  risks  must  be  appropriately  managed  by  CCPs  and  CCPs  must  continue  to  be 
thoroughly  supervised  both  at  the  national  and  the  wider  EU  level.  Therefore,  this  proposal 
aims at ensuring a robust and  joined-up supervision, building on the supervisory system the 
EU currently has in place. 

In addition, since 2017, concerns have been repeatedly expressed about the ongoing risks to 
the EU financial stability arising from the excessive concentration of clearing in some third-
country CCPs, notably in a stress scenario. High-risk but low-probability events can happen, 
and the EU must be prepared to face them8. While EU CCPs have generally proven resilient, 
experience has shown that the EU clearing ecosystem can be made stronger, to the benefit of 
financial  stability.  However,  open  strategic  autonomy  also  means  that  the  EU  needs  to 
safeguard  itself  against  the  financial  stability  risks  which  can  arise  when  EU  market 
participants  are  excessively  reliant  on  third-country  entities,  as  this  can  be  a  source  of 
vulnerability.  Therefore,  this  proposal  aims  at  making  the  equivalence  framework  in  EMIR 
more  proportionate  and  to  better  tailor  cooperation  with  foreign  supervisors  taking  into 
account the risks posed by CCPs based in third countries – and without compromising on the 
need for third countries to have sound rules in place. It is also proposed that the equivalence 
procedure is made simpler when the risks involved in  central  clearing in  a third country are 
particularly low. In addition, this proposal seeks to build up the EU’s central clearing capacity 
and thereby increase liquidity at EU CCPs with the aim to reduce the risks posed to the EU 
financial  stability  by  excessive  exposures  to  third-country  CCPs.  Therefore,  this  proposal 
requires all market participants subject to a clearing obligation, to hold active accounts at EU 
CCPs  for  clearing  products  that  have  been  identified  by  ESMA  as  of  substantial  systemic 
importance for the EU financial stability.  

8 

[…] 

EN 

2 

  EN 

                                                 
 
(Investment  Firms  Directive  or 

This proposal is complemented by a proposal for a Directive introducing a limited number of 
changes to Directive 2013/36/EU9 (Capital Requirements Directive or ‘CRD’), Directive (EU) 
2019/203410 
‘IFD’)  and  Directive  2009/65/EU11 
(Undertakings  for  Collective  Investment  in  Transferable  Securities  Directive  or  ‘UCITS 
Directive’) as regards the treatment of concentration risk towards CCPs and the counterparty 
risk  on  centrally  cleared  derivative  transactions.  These  amendments  are  necessary  to  ensure 
that the objectives of this EMIR review are achieved as well as to assure coherence. The two 
proposals should therefore be read in conjunction. 

• 

Consistency with existing policy provisions in the policy area 

This proposal is related to, and consistent with, other EU policies and ongoing initiatives that 
aim to (i) promote the Capital Markets Union (CMU) 12, (ii) reinforce the EU’s open strategic 
autonomy and (iii) enhance the efficiency and effectiveness of EU-level supervision. 

First,  clearing  capacity  is  an  important  dimension  for  the  CMU.  The  CMU  is  about 
building  deep  and  liquid  EU  capital  markets  that  can  serve  the  needs  of  EU  citizens, 
businesses and financial institutions. The Covid-19 crisis has made it more urgent to deliver 
on  CMU  as  market-based  financing  is  an  essential  component  for  the  European  economy’s 
recovery  and  the  return  to  long-term  growth.  Safe,  robust  and  competitive  post-trade 
arrangements,  in  particular  central  clearing,  in  the  EU  is  essential  for  a  well-functioning 
CMU.  The  proposed  legislative  changes,  including  to  further  strengthen  the  supervisory 
framework,  would  contribute  to  the  development  of  a  more  efficient  and  safer  post-trading 
landscape in the EU. 

Second, competitive, well-developed  and resilient EU CCPs are a  pre-condition for  the 
EU’s  open  strategic  autonomy.  The  Commission  Communication  on  open  strategic 
autonomy13  sets  out  how  the  EU  can  reinforce  its  open  strategic  autonomy  in  the  macro-
economic and financial fields by, in particular, but not only, further developing EU financial 
market  infrastructures  and  increasing  their  resilience.  Building  a  strong  EU  central  clearing 
system with robust capacity reduces risks stemming from excessive reliance on third-country 
CCPs and their supervisors.  

Third,  recent  developments  in  energy  markets,  with  several  energy  companies  facing 
liquidity issues when using derivatives markets, have also illustrated that EMIR needs to be 
enhanced so that the risks to the EU’s financial stability continue to be mitigated in light of 
new  challenges.  This  means  building  a  safe,  robust  and  competitive  EU  central  clearing 
ecosystem, able to withstand economic shocks. 

9 

10 

11 

12 

13 

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the 
activity  of  credit  institutions  and  the  prudential  supervision  of  credit  institutions,  amending  Directive 
2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, OJ L 176, 27.6.2013. 
Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the 
prudential  supervision  of  investment  firms  and  amending  Directives  2002/87/EC,  2009/65/EC, 
2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU, OJ L 314, 5.12.2019. 
Directive  2009/65/EC  of  the  European  Parliament  and  of  the  Council  of  13  July  2009  on  the 
coordination  of  laws,  regulations  and  administrative  provisions  relating  to  undertakings  for  collective 
investment in transferable securities (UCITS) (recast), OJ L 302, 17.11.2009. 
Communication  from  the  Commission,  A  Capital  Markets  Union  for  people  and  businesses  –  New 
action plan, COM(2020) 590 
Communication from the Commission to The European Parliament, the Council, the European Central 
Bank, the European Economic and Social Committee and the Committee of the Regions The European 
economic and financial system: fostering openness, strength and resilience; COM/2021/32 final. 

EN 

3 

  EN 

                                                 
• 

Consistency with other Union policies 

This  initiative  should  be  viewed  within  the  context  of  the  broader  Commission  agenda  to 
make the EU markets safer, more robust, more efficient and competitive. It aims at ensuring 
that  post-trade  arrangements,  in  particular  central  clearing,  that  are  an  essential  element  of 
capital  markets  are  equally  safe,  robust,  efficient  and  competitive.  A  fully  functioning  and 
integrated market for capital will allow the EU’s economy to grow in a sustainable way and 
be  more  competitive,  in  line  with  the  strategic  priority  of  the  Commission  for  an  Economy 
that Works for People, focused on creating the right conditions for job creation, growth and 
investment.  

The initiative in question has no direct and/or identifiable impacts leading to significant harm 
or affecting the consistency  with  the climate-neutrality objectives  and the obligations of the 
European Climate Law.14 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

EMIR sets out the regulatory and supervisory framework for CCPs established in the EU and 
third-country  CCPs  that  provide  central  clearing  services  to  clearing  members  or  trading 
venues  established  in  the  EU.  The  legal  basis  for  EMIR  is  Article  114  of  the  Treaty  of  the 
Functioning  of  the  European  Union  (TFEU)  as  it  establishes  common  rules  for  OTC 
derivatives, CCPs and trade repositories to avoid divergent national measures or practices and 
obstacles  to  the  proper  functioning  of  the  internal  market  while  ensuring  financial  stability. 
Considering  that  this  initiative  proposes  further  policy  actions  to  ensure  the  achievement  of 
these objectives, the related legislative proposal would be adopted under the same legal basis. 

• 

Subsidiarity (for non-exclusive competence)  

The  problems  identified  in  the  impact  assessment  cannot  be  addressed  by  Member  States 
acting alone and necessitate EU action. This proposal amends EMIR, in particular to enhance 
the attractiveness of EU CCPs by facilitating their ability to bring new products to market and 
reducing  compliance  costs  and  strengthening  EU-level  supervision  of  EU  CCPs.  EU  action 
would  therefore  lead  to  reducing  EU’s  excessive  reliance  on  third-country  CCPs  and  thus 
reduce the risks to EU financial stability. A safe, robust, efficient and competitive market for 
central clearing services contributes to deeper, more liquid markets in the EU and is essential 
for a well-functioning CMU. 

Member  States  and  national  supervisors  cannot  on  their  own  solve  the  systemic  risks  of 
highly  integrated  and  interconnected  CCPs  that  operate  on  a  cross-border  basis  beyond  the 
scope  of  national  jurisdictions.  Nor  can  they  mitigate  risks  arising  from  diverging  national 
supervisory practices. Member States also cannot on their own enhance the attractiveness of 
EU  CCPs  and  address  the  inefficiencies  of  the  framework  for  the  cooperation  of  national 
supervisors and EU authorities. As such, the aim of EMIR to increase the safety, robustness, 
efficiency and competitiveness of EU CCPs in the single market and ensure financial stability 
cannot be sufficiently achieved by Member States, as the co-legislators acknowledged in 2012 
when adopting EMIR (and in 2019 when adopting EMIR REFIT and EMIR 2.2). Therefore, 

14 

Regulation (EU) 2021/1119 of the European Parliament and of the Council establishing the framework 
for  achieving  climate  neutrality  and  amending  Regulations  (EC)  No  401/2009  and  (EU)  2018/1999 
(‘European Climate Law’), OJ L 243, 9.7.2021. 

EN 

4 

  EN 

 
                                                 
by  reason  of  the  scale  of  actions,  these  objectives  can  be  better  achieved  at  EU  level  in 
accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European 
Union.  

• 

Proportionality 

The proposal aims to ensure that the objectives of EMIR are met in a proportionate, effective 
and efficient manner. Given the nature of this proposal, there is a key trade-off between the 
effectiveness  of  measures  to  increase  clearing  at  EU  CCPs  and  the  cost  impact  on  clearing 
participants. This trade-off is to be considered in  the calibration and design of the measures 
themselves,  so  as  to  make  costs  proportionate.  The  proposal  also  reviews  the  supervisory 
arrangements for EU CCPs to address the challenges they face due to inefficient authorisation 
processes.  In addition, changes to the supervisory architecture aim at reflecting the need for 
increased  cooperation  of  authorities  in  the  EU  due  to  the  growing  importance  of  EU  CCPs 
while  preserving  the  fiscal  responsibilities  of  the  authorities  of  the  Member  State  of 
establishment.  Furthermore,  the  introduction  of  an  active  account  requirement,  the 
establishment  of  monitoring  at  EU  level  regarding  the  transfer  of  EU  firms’  excessive 
exposures from systemically important third-country CCPs (‘Tier 2 CCPs’) to EU CCPs and 
the  ex-post  approval/non-objection  procedure  for  certain  changes  to  CCPs’  risk  models  as 
well as for the extension of the services they offer, take into account the concerns raised by 
stakeholders,  including  ESMA,  while  safeguarding  the  objectives  of  EMIR.  The  proposal 
does  not  go  beyond  what  is  necessary  to  achieve  these  objectives,  considering  the  need  to 
monitor and to mitigate any risks the operations of CCPs, including third-country CCPs, may 
raise  for  financial  stability.  The  proportionality  of  the  preferred  policy  options  is  further 
assessed in Chapters 7 and 8 of the accompanying Impact Assessment. 

• 

Choice of the instrument 

EMIR  is  a  Regulation  and  thus  it  needs  to  be  amended  by  a  legal  instrument  of  the  same 
nature. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The Commission services consulted extensively, engaging with a broad range of stakeholders, 
including  EU  bodies  (ECB,  European  Systemic  Risk  Board  (ESRB),  European  Supervisory 
Authorities  (ESAs)),  Member  States,  members  of  the  European  Parliament’s  Economic  and 
Monetary Affairs Committee, the financial services sector (banks, pension funds, investment 
funds,  insurance  companies,  etc.)  as  well  as  non-financial  corporates  to  evaluate  whether 
EMIR sufficiently ensures EU financial stability. This process showed that there are ongoing 
risks  to  EU  financial  stability  due  to  the  excessive  concentration  of  clearing  in  a  few  third-
country CCPs. These risks are particularly relevant in a stress scenario.  

Nonetheless, considering the relatively recent entry into force of EMIR 2.2 and the fact that 
some requirements do not apply yet,15 the Commission services did not consider it appropriate 
to  prepare  a  full  back-to-back  evaluation  of  the  entire  framework.  Instead,  key  areas  were 
identified  upfront  based  on  stakeholder  input  and  internal  analysis  (Section  3  of  the 

15 

For  example,  the  regulatory  technical  standards  (RTS)  on  the  procedures  for  the  approval  of  an 
extension  of  services  or  the  approval  of  changes  to  risk  models  under  Articles  15  and  49  of  EMIR 
respectively have not been adopted yet. 

EN 

5 

  EN 

                                                 
accompanying  Impact  Assessment  on  the  problem  definition  explains  in  detail  the  the 
inefficiencies and ineffectiveness of the current rules).  

• 

Stakeholder consultations 

The  Commission  has  consulted  stakeholders  throughout  the  process  of  preparing  this 
proposal. In particular through: 

 

 

 

 

 

 

 

 

a Commission targeted consultation between 8 February and 22 March 202216. It was 
decided that the consultation should be targeted and the questions were focused on a 
very  specific  and  rather  technical  area.  71  stakeholders  responded  to  the  targeted 
consultation  via  the  online  form  while  some  confidential  responses  were  also 
submitted via email. 

a Commission Call for Evidence between 8 February and 8 March 202217. 

consultations  of  stakeholders  through  the  Working  Group  on  the  opportunities  and 
challenges of transferring derivatives from the  United Kingdom (UK) to the EU, in 
the  first  half  of  2021  including  several  stakeholder  outreach  meetings  in  February, 
March and June 2021. 

meeting  with  Members  of  the  European  Parliament  on  4  May  as  well  as  bilateral 
meetings subsequently. 

meeting  with  Member  States’  experts  on  30  March  2022,  16  June  2022  and  8 
November 2022.  

meetings of the Financial Services Committee on 2 February and 16 March 2022. 

meetings  of  the  Economic  and  Financial  Committee  on  18  February  and  29  March 
2022. 

bilateral  meetings  with  stakeholders  as  well  as  confidential  information  received 
from a wide range of stakeholders. 

The main messages of this consultative process were: 

 

 

 

 

16 

17 

Work  starting  in  2021  showed  that  improving  the  attractiveness  of  clearing, 
encouraging 
the 
supervisory arrangements in the EU will take time.  

infrastructures  and  strengthening 

the  development  of  EU 

A variety of measures  were identified that could  help  improve the  attractiveness of 
EU CCPs  and clearing  activities as well  as  ensure that their risks  are appropriately 
managed and supervised. 

These identified measures are not only within the remit of the Commission and co-
legislators, but could also potentially require actions from the ECB, national central 
banks, ESAs, national supervisory authorities, CCPs and banks.  

The  consultation  showed  that  market  participants  generally  prefer  a  market-driven 
approach to regulatory measures, to minimise costs and for EU market participants to 
regulatory  measures  were 
remain  competitive 

internationally.  Nevertheless, 

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/regulatory-process-financial-
services/consultations-banking-and-finance/targeted-consultation-review-central-clearing-framework-
eu_en  
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13378-Derivatives-clearing-
Review-of-the-European-Market-Infrastructure-Regulation_en  

EN 

6 

  EN 

                                                 
supported to a certain extent, especially when allowing for a faster approval process 
for CCPs’ new products and services18. 

 

Measures  deemed useful to  enhance EU CCP’s attractiveness were:  maintaining an 
active  account  with  an  EU  CCP,  measures  to  facilitate  expanding  services  by  EU 
CCPs,  broadening  the  scope  of  clearing  participants,  amending  hedge  accounting 
rules and enhancing funding and liquidity management conditions for EU CCPs. 

The proposal takes  this  stakeholder  feedback into account,  as well  as the feedback received 
through  meetings  with  a  broad  range  of  stakeholders,  EU  authorities  and  institutions.  It 
introduces targeted amendments to EMIR aimed at:  

 

 

 

Improving  the  attractiveness  of  EU  CCPs  by  simplifying  the  procedures  for 
launching  products  and  changing  models  and  parameters  and  introducing  a  non-
objection/ex-post  approval/review  for  certain  changes.  This  allows  EU  CCPs  to 
introduce  new  products  and  model  changes  more  quickly  while  ensuring  adequate 
risk  considerations  are  upheld  and  without  endangering  financial  stability  and 
therefore making EU CCPs more competitive. 

Encouraging central clearing in  the EU to safeguard financial  stability by requiring 
clearing members and clients to hold, directly or indirectly, an active account at EU 
CCPs, and facilitating clearing by clients will help to reduce exposures to, and with it 
excessive  reliance  on,  Tier  2  third-country  CCPs  which  is  a  risk  to  the  financial 
stability of the EU.   

Enhancing  the  assessment  and  management  of  cross-border  risk  by  ensuring  that 
authorities  in  the  EU  have  adequate  powers  and  information  to  monitor  risks  in 
relation  to  both  EU  and  third-country  CCPs,  including  by  enhancing  their 
supervisory cooperation within the EU. 

• 

Collection and use of expertise 

In preparing this proposal the Commission relied on the following external expertise and data:  

 

 

 

 

 

18 

19 
20 

ESMA’s  Report  under  Article  25(2c)  of  EMIR  submitted  to  the  Commission  in 
December 202119; the report also took into account answers to ESMA’s surveys and 
data collection exercises from CCPs and clearing participants; 

ESRB’s  response  to  ESMA’s  consultation  under  Article  25  (2c)  EMIR,  issued  in 
December 202120; 

Bank for International Settlement statistics; 

CEPS, 2021, ”Setting EU CCP policy – much more than meets the eye”; and 

ClarusFT database. 

Rather no/limited support regarding higher capital requirements in the CRR for exposures to Tier 2 non- 
EU CCPs , exposure reduction targets toward specific Tier 2 non- EU CCPs, an obligation to clear in 
the EU and macroprudential tools. 
ESMA report on UK CCPs, 2021. 
https://www.esrb.europa.eu/pub/pdf/other/esrb.letter220120_on_response_to_esma_consultation~3182592790.en.pdf  

EN 

7 

  EN 

 
                                                 
This  input  has  been  complemented  with,  at  times  confidential,  quantitative  and  qualitative 
input from financial markets participants. 

• 

Impact assessment 

The  Commission  conducted  an  impact  assessment  of  relevant  policy  alternatives.  Policy 
options  were  identified  based  on  the  following  four  drivers:  (i)  complex,  lengthy  and 
burdensome procedures, (ii) limited participation in EU CCPs and concentration in incumbent 
CCPs,  (iii)  interconnectedness  of  the  EU  financial  system,  (iv)  inefficient  framework  for 
supervisory cooperation. The policy options were assessed against the specific objectives of 
improving the attractiveness of EU  CCPs,  encouraging  clearing in  EU CCPs and enhancing 
the assessment and management of cross-border risks. 

The  Impact  Assessment  received  a  positive  opinion  with  comments  by  the  Regulatory 
Scrutiny Board21 on 14 September 2022 which made the following main recommendations for 
improvements: 

 

 

 

explain what success would look like and how it will be effectively monitored;  

make the range of options considered more comprehensive; 

bring out the rationale behind, and the envisaged design of, key measures to be 
dealt  with  through  implementing  regulation  and  clarify  the  criteria  and 
parameters that will frame their development. 

The requested clarifications were added in the relevant sections of the Impact Assessment. 

Based  on  the  assessment  and  comparison  of  all  policy  options,  the  Impact  Assessment 
concluded on the following preferred policy options:  

  Measures  to  improve  the  attractiveness  of  EU  CCPs:  a  combination  of 
measures  simplifying  the  procedures  for  launching  products  and  changing 
models as well as introducing an ex-post approval/non-objection procedure for 
certain  changes was identified as the preferred option. These measures would 
simplify  current  procedures  while  preserving  financial  stability.  Simplifying 
the  procedures  for  launching  products  and  changing  models  as  well  as 
introducing an ex-post/non-objection approval/review for certain changes were 
also  assessed  as  separate  options.  However,  as  they  would  individually  only 
partially meet the objectives, a combination of both options was deemed most 
appropriate to meet the outlined objectives. 

  Measures  to  encourage  central  clearing  in  the  EU  to  safeguard  financial 
stability:  a  combination of different options was  considered most appropriate 
to meet the objectives, which would include the following aspects: i) requiring 
clearing  members  and  clients  to  hold  an  active  account  at  EU  CCPs;  ii) 
ensuring  compliance  with  the  new  requirements  on  clearing  activities;  iii) 
encouraging public entities that clear voluntarily through a CCP to do so in the 
EU via a Communication; and iv) facilitating central clearing. Combining these 
options  would  allow  to  address  excessive  reliance  on  Tier  2  CCPs,  increase 
central  clearing  in  the  EU  and  remove  obstacles  to  central  clearing.  Some  of 
these  measures  may  entail  level  2  acts  setting  out  the  specific  aspects.  The 

21 

Add link to positive RSB opinion 

EN 

8 

  EN 

                                                 
policy  options  have  also  been  assessed  separately  but  a  combination  of  the 
options was considered most effective to meet the objectives. 

  Measures  to  enhance  the  assessment  and  management  of  cross-border 
risks: targeted amendments to the current supervisory framework were deemed 
most  appropriate  and  proportionate  as  they  attain  the  right  balance  between 
achieving  the  following  objectives:  (i)  strengthen  the  framework  for  robust 
consideration of cross-border risks, (ii) enhance EU financial stability, and (iii) 
improve  the  attractiveness  of  EU  CCPs,  while  acknowledging  that  resolution 
decisions impacting CCPs, clearing members and clients are taken at national 
level  and  Member  States  remain  ultimately  responsible  for  supporting 
financially CCPs authorised in their jurisdiction. 

 

The overall package of  options will have a positive effect on the post-trading 
landscape in the EU by improving the attractiveness of EU CCPs, encouraging 
central clearing in the EU, enhancing the assessment and management of cross-
border  risk  and  thus  contributing  to  the  competitiveness  of  the  EU  financial 
markets as well as EU financial stability. 

• 

Regulatory fitness and simplification 

The initiative aims to enhance the attractiveness of EU CCPs, reduce the excessive reliance of 
EU  market  participants  on  non-EU  CCPs,  safeguard  EU  financial  stability  and  enhance  the 
EU’s open strategic autnomy. As such, it does not aim at reducing costs per se. However, the 
preferred  policy  option  to  increase  EU  CCPs’  attractiveness  will  lead  to  a  simplification  of 
procedures for EU CCPs, reducing administrative burdens and making their operations more 
efficient, thus also bringing about a reduction of costs. The approximate range of these cost 
savings has been  estimated based on  interactions with stakeholders and several  assumptions 
which  were  needed  to  extrapolate  the  effects  to  the  whole  EU.  This  cost  saving  is  of 
administrative nature and thus counts under the “one in, one out” approach as an “out” in the 
range  of  approx.  EUR  5  million  to  EUR  15  million  (EU  total).  This  is  likely  to  be 
concentrated in few EU CCPs (as few EU CCPs might bring new products to the market in a 
given year) and is likely to be beneficial in terms of their attractiveness. As regards potential 
additional costs relevant for “one in one out”, i.e. very limited paperwork related to opening 
an account with a CCP, the administrative costs are negligible (for more details, see Annex 3 
of the accompanying Impact Assessment)  

As regards the active account requirement, based on estimates of the Commission services on 
the basis on confidential information, roughly 60% of the EU clients of EU clearing members 
already have an account for clearing interest rate swaps at an EU CCP, and roughly 85% have 
one  for  credit  default  swaps.  Thus,  for  these  clients  opening  an  account  at  an  EU  CCP  for 
these types of products would not be an additional cost. In addition, any cost could depend on 
which  CCP  they  participate  in:  according  to  confidential  information  provided  to  the 
Commission services, in some EU CCPs, for example, the costs of an account per se are zero 
under certain conditions. The active account requirement will be further specified in an RTS 
to  be  prepared  by  ESMA,  which  will  be  subject  to  a  public  consultation  and  a  cost  benefit 
analysis. 

• 

Fundamental rights 

The EU is committed to high standards of protection of fundamental rights and is signatory to 
a broad set of conventions on human rights. In this context, this proposal respects these rights, 
in particular the economic rights, as listed in the main United Nations conventions on human 

EN 

9 

  EN 

rights, the Charter of Fundamental Rights of the European Union which is an integral part of 
the EU Treaties, and the European Convention on Human Rights.  

4. 

BUDGETARY IMPLICATIONS 

The proposal will have no implications for the budget of the Union. 

This legislative initiative will have no impact on expenditures for ESMA or other bodies of 
the European Union. 

The impact assessment identified only moderate additional costs for ESMA, while at the same 
time the proposed  measures  create efficiencies that will lead to cost  reductions.  In addition, 
some  provisions  clarify  and  recalibrate  the  role  of  ESMA  whilst  not  constituting  new  tasks 
and are therefore to be considered budget neutral.  

Costs identified relate to the setting up and operation of a new central database, i.e. an IT tool 
for  the  submission  of  supervisory  documents.  However,  even  though  ESMA  might  incur 
higher costs related to developing or choosing such a new IT tool as well as operating it, this 
IT  tool  will  also  create  efficiencies  and  ESMA  will  benefit  from  those.  These  efficiencies 
relate  to  considerably  less  manual  work  in  the  reconciliation  and  sharing  of  documents,  the 
following  up  on  deadlines  and  questions  as  well  as  coordination  with  national  competent 
authorities  (NCAs),  the  college  and  the  CCP  Supervisory  Committee.  These  benefits  are 
likely to outweigh the costs incurred. 

Furthermore,  initial  additional  (paper-)work  related  to  the  modification  of  tools  and 
procedures, as well as to enhanced cooperation, may increase costs at first, but these are likely 
to be reduced, or remain stable, over time. Notably, ESMA will be required to draft regulatory 
/  implementing  technical  standards  (RTS/ITS)  on  the  format  and  content  of  the  documents 
CCPs  are  required  to  submit  to  supervisory  authorities  when  submitting  an  application,  on 
standards  for  reporting  on  clearing  activity  and  exposure  to  non-EU  CCPs  and  the 
specification of the requirement for clearing members and clients to have an active account at 
a  Union  CCP,  as  well  as  a  few  reports,  including  the  annual  report  on  the  results  of  their 
monitoring  activity  and  cross-border  activities  and  the  bi-annual  report  on  non-financial 
counterparties’ clearing activities. In undertaking those activities, ESMA can build on already 
existing  internal  processes  and  procedures,  and  it  may  convert,  where  relevant,  those 
procedures  into  RTSs/ITSs.  In  defining  the  active  account  requirement  for  some  already 
identified instruments, and their ongoing monitoring, ESMA can take into account the work it 
has  undertaken  under  Article  25(2c)  of  EMIR  when  assessing  which  Tier  2  CCPs’  clearing 
services  are  of  substantial  systemic  importance  to  the  Union  or  one  or  more  of  its  Member 
States and might therefore only require some very limited additional resources. 

Another category to be considered in the cost analysis is the modification of procedures and 
tools  to  the  new  supervisory  cooperation  framework.  The  cooperation  in  joint  supervisory 
teams and the establishment of a joint monitoring mechanism at EU level are new elements in 
the  supervisory  framework.  However,  they  are  mainly  tools  to  improve  the  cooperation 
between authorities and  cover  tasks that are already, in  all essential parts,  performed  by the 
authorities,  except  for  the  monitoring  of  the  implementation  of  the  requirements  set  out  for 
active  accounts  at  EU  CCPs,  such  as  fees  for  access  charged  by  CCPs  to  clients  for  active 
accounts.  These  new  structures  will  likely  require  some  reorganisation  of  resources  and 
potentially  create  the  need  for  additional  meetings  but  will  not  have  substantial  budgetary 
implications.  Moreover,  the  recalibrated  supervisory  process  also  comes  with  benefits, 

EN 

10 

  EN 

notably clearer responsibilities, avoiding unnecessary duplicative work and less work due to 
the introduction of non-objection procedures which enable ESMA and NCAs to focus on the 
material  aspects  of  supervision  in  relation  to  the  extension  of  central  clearing  services  and 
changes to CCPs’ risk models. 

The  proposed  change  clarifying  that  ESMA  can  withdraw  the  recognition  of  third-country 
CCPs that refuse to pay fees to ESMA will be positive in terms of costs. This avoids ESMA 
having to invest a considerable amount of work without getting remunerated for it. 

In addition, further provisions are introduced which clarify and recalibrate the role of ESMA 
and  are  therefore  to  be  considered  budget  neutral.  For  instance,  ESMA  already  has  the 
obligation  to  issue  opinions  before  NCAs  adopt  certain  decisions,  however  the  content  of 
those  opinions  is  recalibrated  to  ensure  a  higher  degree  of  efficiency  in  the  supervisory 
process and ESMA is given a formal opportunity to issue an opinion on CCPs’ annual review 
and evaluation as well as on the withdrawal of their authorisation and margin requirements. In 
addition,  ESMA  is  to  take  a  clear  role  in  coordinating  and  providing  recommendations  in 
emergency  situations.  These  are  tasks  that,  in  all  material  respects,  relate  to  their  already 
existing ongoing work and the provisions clarify and therefore strengthen ESMA’s position, 
providing clear responsibilities. 

Even  though  smaller  changes  to  the  role  of  other  European  Union  bodies,  such  as  the 
European  Commission  or  the  European  Central  Bank,  are  introduced,  they  will  not  have 
budgetary implications. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The measures aim at improving the attractiveness of EU CCPs and enhancing the supervision 
of  cross-border  risks  in  the  EU.  As  such,  several  changes  to  EMIR  are  considered  and,  in 
some  cases,  amendments  to  other  pieces  of  EU  legislation.  The  proposal  ensures  that  the 
relevant EU bodies can access the relevant information, while not giving rise to undue costs. 
The proposal includes a provision that an evaluation of EMIR in its entirety should be carried 
out,  with  a  focus  on  its  effectiveness  and  efficiency  in  meeting  its  original  aims  (i.e. 
improving the efficiency and safety of EU clearing markets and preserving financial stability). 
The evaluation should consider all aspects of EMIR, but especially improved attractiveness of 
EU CCPs. In principle, this evaluation should take place at least 5 years after the Regulation 
enters into and would seek to collect input from all relevant stakeholders. 

• 

Detailed explanation of the specific provisions of the proposal 

Detailed explanation of the specific provisions of the proposal 

1. 

Intragroup transactions 

EMIR provides for a framework exempting intragroup transactions  (domestically and cross-
border)  from  the  clearing  obligation  under  Article  4  and  the  margin  requirements  under 
Article  11  of  that  Regulation.  In  order  to  provide  more  legal  certainty  and  predictability 
concerning  the  framework  for  intragroup  decisions,  the  need  for  an  equivalence  decision  is 
replaced by a list of jurisdictions for which an exemption cannot be granted. Article 3 should 
therefore  be  amended  to  replace  the  need  for  an  equivalence  decision  with  a  list  of  third 
countries  for  which  an  exemption  should  not  be  granted  and  Article  13  should  be  deleted. 
These  third  countries  should  be  those  that  are  listed  as  a  high-risk  third  country  that  has 
strategic deficiencies in its regime on anti-money laundering and counter terrorist financing, 

EN 

11 

  EN 

in accordance with Article 9 of Directive (EU) 2015/849 of the European Parliament and of 
the Council, and those listed in Annex I of the Union list of non-cooperative jurisdictions for 
tax purposes. The Commission is also empowered to adopt delegated acts to identify the third 
countries whose entities may not benefit from those exemptions despite not being identified in 
those lists, as being an entity from a third country identified in those lists is  not necessarily 
the  only  factor  that  can  influence  risk,  including  counterparty  risk  or  legal  risk,  associated 
with derivative contracts.  

2. 

Clearing obligation 

Article  4  is  amended  to  introduce  an  exemption  from  the  clearing  obligation  where  an  EU 
financial counterparty or a non-financial counterparty, subject to the clearing obligation under 
EMIR,  enters  into  a  transaction  with  a  pension  scheme  arrangement  established  in  a  third 
country which is exempted from the clearing obligation under its national law. 

3. 

Clearing obligation for financial counterparties 

Article  4a  is  amended  and  as  a  result,  when  calculating  the  position  towards  the  thresholds 
under  Articles  4a  of  EMIR,  only  those  derivative  contracts  that  are  not  cleared  at  a  CCP 
authorised  under  Article  14  or  recognised  under  Article  25  of  that  Regulation  should  be 
included in that calculation.  

4. 

Active account 

A  new  Article  7a  is  introduced  in  order  to  address  the  risks  associated  with  excessive 
exposures  of  EU  clearing  members  and  clients  to  third-country  CCPs  that  provide  clearing 
services  identified  as  of  substantial  systemic  importance  by  ESMA,  and  thereby  ensure  the 
integrity and stability of the EU financial system. This article requires financial counterparties 
and  non-financial  counterparties  that  are  subject  to  the  clearing  obligation,  to  hold  active 
accounts,  directly  or  indirectly,  at  CCPs  established  in  the  EU,  to  clear  at  least  a  certain 
proportion of the services identified as of substantial systemic importance at EU CCPs, and to 
report  on  that.  This  requirement  should  lead  to  a  reduction  of  excessive  exposures  in 
substantially  systemic  clearing  services  offered  by  the  relevant  Tier  2  CCPs,  to  the  extent 
necessary to safeguard financial stability. ESMA, in cooperation with EBA, EIOPA and the 
ESRB  and  after  consulting  the  ESCB,  shall  establish  the  details  of  the  calibration  of  the 
activity  to  be  maintained  in  these  active  accounts  and  the  reporting  requirements  of 
transactions  cleared  at  such  active  accounts.  The  Commission  is  empowered,  where  ESMA 
undertakes an assessment pursuant to Article 25(2c), to adopt a delegated act to amend the list 
of  categories  of  derivative  contracts  which  are  subject  to  the  active  account  requirement  by 
adding or removing categories from that list. 

5. 

Information on clearing services 

A new Article 7b is introduced to require clearing members and clients that provide clearing 
services, to inform their clients about the possibility to clear a relevant contract at an EU CCP. 

Article 7b also introduces an obligation for EU clearing members and EU clients to report to 
their competent  authority  the scope of clearing  undertaken  at  non-EU CCPs. To ensure that 
the information to be submitted is specified and provided in a harmonised manner, ESMA is 
required  to  develop  draft  regulatory  and  implementing  technical  standards  specifying  the 
required information. 

6. 

Reporting obligation 

EN 

12 

  EN 

Article  9  is  amended  to  remove  the  exemption  from  reporting  requirements  for  transactions 
between  counterparties  within  a  group,  where  at  least  one  of  the  counterparties  is  a  non-
financial counterparty, in order to ensure visibility on intra-group transactions. 

7. 

Clearing obligation for non-financial counterparties 

Article  10  is  amended  to  require  ESMA  to  review  and  clarify,  where  appropriate,  the 
regulatory  technical  standards  relating  to  the  criteria  for  establishing  which  OTC  derivative 
contracts are objectively measurable as reducing risks, the so-called hedging exemption, and 
the  designation  of  thresholds  in  order  to  properly  and  accurately  reflect  the  risks  and 
characteristics in derivatives, and to consider whether the classes of OTC derivatives, namely 
interest  rate,  foreign  exchange,  credit  and  equity  derivatives,  are  still  the  relevant  classes. 
ESMA  is  encouraged  to  consider  and  provide,  amongst  others,  more  granularity  for 
commodity derivatives. 

Article 10 is also amended to require, when calculating the positions towards the thresholds, 
that only those derivative contracts that are not cleared at a CCP authorised under Article 14 
or recognised under Article 25 should be included in that calculation. 

8. 

Risk-mitigation techniques for OTC derivative contracts not cleared by a CCP 

Article 11 is amended to provide non-financial counterparties that become subject for the first 
time  to  the  obligation  to  exchange  collateral  for  OTC  derivative  contracts  not  cleared  by  a 
CCP,  with  an  implementation  period  of  4  months  in  order  to  negotiate  and  test  the 
arrangements to exchange collateral.  

EBA  may  issue  guidelines  or  recommendations  to  ensure  a  uniform  application  of  the  risk-
management procedures in cooperation with the other ESAs.  

9. 

Authorisation of a CCP and extension of activities and services 

Articles  14  and  15  are  amended  to  clarify  that  authorised  CCPs  should  also  be  able  to  be 
authorised to provide clearing services and activities in non-financial instruments, in addition 
to their authorisation to provide clearing services and activities in financial instruments. 

10. 

Authorisation  of  a  CCP,  extension  of  activities  and  services  and  procedure  for 
granting and refusing authorisation 

Articles  14,  15  and  17  are  amended  in  order  to  ensure  the  relevant  procedures  for  CCPs  to 
expand their product offer are shorter, less complex and more certain in their outcome for EU 
CCPs.  The  competent  authorities  are  required  to  swiftly  acknowledge  receipt  of  the 
application assessing whether the documents required for the authorisation or extension have 
been provided by the CCP. To ensure that EU CCPs submit all required documents with their 
applications,  ESMA  is  required  to  develop  draft  regulatory  and  implementing  technical 
standards specifying such documents, their format and content.  In addition,  the CCP should 
submit all documents to a central database where they should be shared instantaneously with 
the  CCP’s  competent  authority,  ESMA  and  the  college.  Furthermore,  the  CCP’s  competent 
authority, ESMA and the college, during a predefined assessment period, should interact with 
each other and ask the CCP questions to ensure a flexible and cooperative process.  

11. 

Non-objection and ex-post procedures for granting a request fo extension of activities 
or services 

A  new  Article  17a  is  introduced  to  provide  CCPs  with  the  possibility  to  undergo  a  non-
objection  procedure,  instead  of  a  regular  procedure,  for  the  authorisation  of  additional 

EN 

13 

  EN 

services  or  activities  a  CCP  intends  to  offer  which  do  not  increase  the  risks  for  the  CCP. 
Article 17a states which additional services and activities are considered non-material and are 
therefore  to  be  approved  through  such  a  non-objection  procedure  by  that  CCP’s  competent 
authority  and  for  which  the  CCP  may  start  to  offer  before  the  decision  is  received  by  the 
CCP’s  competent  authority.  Apart  from  these  cases,  a  CCP  may  also  ask  its  competent 
authority  for  the  non-objection  procedure  to  apply  where  it  considers  that  the  proposed 
additional service or activity would not increase its risks.  

12. 

Procedure for seeking the opinion from ESMA and the college 

A new Article 17b is introduced in order to clarify the scope and process to be followed where 
a  competent  authority  seeks  the  opinion  of  ESMA  and  the  college  before  adopting  a 
supervisory  decision  for  which  the  CCP  does  not  submit  an  application,  e.g.  regarding  a 
CCP’s compliance with requirements on record-keeping or conflicts of interests. 

13. 

College and opinion of the college 

Articles  18  and  19  are  amended  to  further  foster  a  cooperative  supervision  of  CCPs  on  an 
ongoing basis. The college is therefore requested to also issue an opinion where a competent 
authority considers withdrawing a CCP’s authorisation as well as when a competent authority 
conducts the annual review and evaluation of that CCP. ESMA should manage and chair the 
college for each EU CCP and be granted the right to vote. 

14. 

Withdrawal of authorisation 

Article 20 is amended to require the competent authority to consult ESMA and the members 
of the college before the CCP’s competent authority takes a decision to withdraw, or restrict 
the scope of, a particular service or activity , except where a decision is required urgently.  

15. 

Annual review 

Article  21  is  amended  to  indicate  that  the  annual  review  should  consider  the  services  or 
activities  the  CCP  provides  or  the  model  changes  the  CCP  uses  based  on  a  non-objection 
procedure. Also, the frequency of the report resulting from the review is further specified ( the 
report  should  be  delivered,  at  least,  on  a  yearly  basis  on  a  given  date).  Moreover,  it  is 
specified that the report is subject to the opinion by ESMA and the college. 

16. 

Supervisory  cooperation  between  competent  authorities  and  ESMA  with  regards  to 
authorised CCPs and procedure for granting and refusing authorisation 

Articles 17 and 23a are amended in order to enable ESMA to issue an opinion to the CCP’s 
competent  authority  also  in  relation  to  a  CCP’s  annual  review  and  evaluation,  margin 
requirements and the withdrawal of its authorisation. When issuing such an opinion, ESMA is 
to assess the CCP’s compliance with the relevant EMIR requirements, focusing in particular 
on identified cross-border risks or risks to EU financial stability.  

Moreover, ESMA should publish the fact that a competent authority does not comply or does 
not intend to comply with its opinion or the opinion of the college or with any conditions or 
recommendations  included  therein.  ESMA  can  also  publish  the  reasons  for  non-compliance 
provided by the competent authority. 

Article 23a is amended to further specify the role of ESMA in strengthening the coordination 
in emergency situations and assessing risks, in particular on a cross-border basis.  

17. 

Joint  Supervisory  Teams,  non-objection  procedures  for  granting  a  request  of 
extension of activities or services and review and evaluation 

EN 

14 

  EN 

A  new  Article  23b  is  introduced  in  order  to  increase  the  cooperation  of  the  authorities 
involved in  the supervision of authorised EU CCPs by establishing joint  supervisory teams. 
The  tasks  of  joint  supervisory  teams  include:  (i)  to  provide  input  to  the  CCP’s  competent 
authority  within  the  context  of  the  non-objection  procedure  for  extending  a  CCP’s  existing 
authorisation,  (ii)  to  assist  in  establishing  the  frequency  and  depth  of  a  CCP’s  review  and 
evaluation and (iii) to participate to on-site inspections. 

18. 

Joint Monitoring Mechanism 

A new Article 23c is introduced in order to establish a cross-sectoral monitoring mechanism 
bringing  together  Union  bodies  involved  in  the  supervision  of  EU  CCPs,  clearing  members 
and clients. ESMA, in cooperation with the other bodies participating to the Joint Monitoring 
Mechanism,  is  to  submit  an  annual  report  to  the  European  Parliament,  the  Council  and  the 
Commission  on  the  results  of  the  monitoring  activity  in  order  to  inform  future  policy 
decisions. ESMA may also issue guidelines or recommendations if it considers that competent 
authorities fail to  ensure clearing members’ and  clients’ compliance with  the active account 
requirement or it identifies a risk to the EU financial stability. 

19. 

Emergency situation 

Article  24  is  amended  to  further  enhance  the  role  of  ESMA  in  an  emergency  situation  by 
enabling ESMA to convene meetings of the CCP Supervisory Committee, either on its own 
initiative or upon request, potentially with an enlarged composition, to coordinate effectively 
competent  authorities’  responses.  ESMA  is  also  empowered  to  ask,  by  simple  request, 
information  from  market  participants  in  order  to  perform  its  coordination  function  in  these 
cases. ESMA may also issue recommendations directed to the CCP’s competent authorities.  

20. 

CCP Supervisory Committee 

Article 24a is amended in order for ESMA to map and identify the supervisory priorities, to 
consider cross-border risks including interconnections, interlinkages and concentration risks. 
In addition, Article 24a is amended to allow central banks of issue to attend all meetings of 
the CCP Supervisory Committee for EU CCPs and for the relevant authorities for clients and 
EU bodies to be invited, where appropriate. 

21. 

Recognition of a third-country CCP 

Article  25  is  amended  to  clarify  that  where  ESMA  undertakes  a  review  of  a  third-country 
CCP’s  recognition,  that  CCP  should  not  be  obliged  to  submit  a  new  application  but  should 
provide ESMA with all information necessary for such review.  

Article 25 is amended to introduce the possibility for the Commission, where in the interests 
of the Union, to take a proportionate approach and waive the requirement for a third country 
to  have  an  effective  equivalent  system  for  the  recognition  of  third-country  CCPs  when 
adopting an equivalence decision for that third-country.  

To  ensure  that  cooperation  arrangements  are  proportionate,  ESMA  should  tailor  them  to 
different jurisdictions based on the CCP(s) established in the respective jurisdiction. For Tier 
2  CCPs  the  cooperation  arrangements  should  cover  a  broader  range  of  information  to  be 
exchanged  between  ESMA  and  the  relevant  third-country  authorities  and  with  an  increased 
frequency. 

Article 25 is  further amended in  order for cooperation arrangements to  include the right  for 
ESMA  to  also  be  informed  where  a  Tier  2  CCP  is  required  to  enhance  its  preparedness  in 
financial distress, by, for example, establishing a recovery plan or where an authority in such 
a  third  country  establishes  resolution  plans.  ESMA  is  also  to  be  informed  of  the  aspects 
relevant for the financial stability of the EU in relation to emerging crisis.  

EN 

15 

  EN 

22. 

Ongoing compliance with the conditions for recognition 

Article 25b is amended to clarify that Tier 2 CCPs are to provide ESMA with information on 
a regular basis.  

23. 

Withdrawing of recognition and public notice 

Article 25p and 25r are amended to clarify that ESMA can withdraw the recognition where a 
non-EU  CCP  infringes  any  of  the  requirements  under  EMIR  and  can  issue  a  public  notice 
where fees are not paid or where a CCP has not taken a remedial action requested by ESMA.  

24. 

Information to competent authorities 

Article 31 on the notification on changes to the management of a CCP is amended to clarify 
the  procedure  in  relation  to  the  sharing  of  information  and  issuing  ESMA  and  college 
opinions.  

25. 

ESMA and college opinions 

Articles 32, 35, 41 and 54 are amended to clarify the requests for ESMA and college opinions.  

26. 

Participation 
requirements 

requirements  and  general  provisions 

regarding  organisational 

Articles  26  and  37  are  amended  to  clarify  that  CCPs  should  not  be  allowed  to  be  clearing 
members of other CCPs nor accept to have other CCPs or clearinghouses as clearing members 
or indirect clearing members.  

27. 

Participation requirements 

Article 37 is amended to set out that where a CCP has on-boarded or intends to on-board non-
financial counterparties as clearing members, that CCP should ensure that certain additional 
requirements on margin requirements and default funds are met. Non-financial counterparties 
should not be permitted to offer client clearing services and only be allowed to keep accounts 
at the CCP for assets and positions held for their own account. The competent authority for 
the CCP should report to ESMA and the college on a regular basis on the appropriateness of 
accepting non-financial counterparties as clearing members. ESMA is mandated to prepare a 
draft RTS on the elements  to  be considered when determining the access criteria and might 
issue  an  opinion  on  the  appropriateness  of  such  arrangements  following  an  ad-hoc  peer 
review.  

28. 

Transparency 

Article 38 is amended in order to ensure that clients and indirect clients have better visibility 
and predictability of margin  calls. Clearing members and clients providing clearing services 
should ensure transparency towards their clients. 

29. 

Margin requirements 

Article 41 is amended to ensure that CCPs continuously revise the level of their margins while 
taking  into  account  any  potentially  procyclical  effects  of  such  revisions,  reflecting  current 
market  conditions  and  considering  the  potential  impact  of  their  intraday  margin  collections 
and payments on the liquidity position of their participants. 

30. 

Liquidity risk controls 

Article  44  is  amended  to  better  reflect  the  entities  whose  default  could  materially  affect  a 
CCP’s liquidity position by requiring a CCP to take into account the liquidity risk generated 
by  the  default  of  at  least  two  entities,  including  clearing  members  and  liquidity  service 
providers 

EN 

16 

  EN 

31. 

Collateral requirements 

Article  46  is  amended  to  allow  bank  guarantees  and  public  guarantees  to  be  considered 
eligible  as  highly  liquid  collateral  provided  that  they  are  unconditionally  available  upon 
request  within the liquidation  period and making  sure a CCP takes them  into account  when 
calculating its overall exposure to the bank. Furthermore, a CCP should take into account any 
potential procyclical effects when revising the level of the haircuts it applies to the assets it 
accepts as collateral.  

32. 

Review of models, stress testing and back testing 

Article  49  is  amended  in  order  to  ensure  the  relevant  procedures  for  CCPs  to  apply  model 
changes  are  shorter,  less  complex  and  more  certain  in  their  outcome.  The  competent 
authorities are required to swiftly acknowledge receipt of the application for the model change 
by assessing whether the documents required have been provided by the CCP. To ensure that 
EU CCPs submit all required documents with their applications, ESMA is required to develop 
draft  regulatory  and  implementing  technical  standards  specifying  such  documents,  their 
format and  content.  In  addition, the CCP should submit all documents  to  a central  database 
where they should be shared instantaneously with the CCP’s competent authority, ESMA and 
the college. Article 49 also  introduces the possibility to  undergo a non-objection procedure, 
instead of a regular procedure, for the validation of model changes considered not significant 
and specifies which changes are considered significant. Where a CCP considers the change as 
non-significant  it  may  start  to  use  the  model  change  before  the  decision  is  received  by  the 
CCP’s competent authority. 

33. 

Amendments to the Reports and Review 

Article  85  is  amended  to  require  the  Commission  to  submit  by  [5  years  after  the  entry  into 
force  of  this  Regulation]  a  report  assessing  the  application  of  this  Regulation.  The 
Commission is required to submit that report to the European Parliament and to the Council, 
together  with  any  appropriate  proposals.  In  addition,  the  current  requirement  to  deliver  a 
report by 2 January 2023 is removed.  ESMA is also required to submit a  report by [3 years 
after the entry into force of this Regulation] on its staffing and resources.  

Amendments to the Capital Requirements Regulation (CRR) 

34. 
Article 382(4) of the CRR22 is amended in order to align relevant provisions in the CRR with 
the  changes  suggested  in  this  proposal.  The  amendment  adjusts  the  scope  of  the  own  funds 
requirement  for  credit  valuation  adjustment  risk,  notably  by  clarifying  which  intragroup 
transactions can be excluded from that requirement. 

Amendments to the Money Market Funds Regulation (MMFR) 

35. 
Article  17  of  the  MMFR23  is  amended  regarding  the  provisions  on  investment  policy 
regarding  counterparty  risk  limits.  It  excludes  centrally  cleared  derivative  transactions  from 
the counterparty risk limits set out in Article 17(4) and 17(6)(c) of the MMFR. Furthermore, a 
definition of a CCP is added in Article 2, specifically as a new point (24). 

22 

23 

Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on 
prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 
648/2012 Text with EEA relevance; OJ L 176, 27.6.2013, p. 1–337. 
Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money 
market funds (Text with EEA relevance.); OJ L 169, 30.6.2017, p. 8–45. 

EN 

17 

  EN 

 
 
                                                 
2022/0403 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulations (EU) No 648/2012, (EU) No 575/2013 and (EU) 2017/1131 as 
regards measures to mitigate excessive exposures to third-country central counterparties 
and improve the efficiency of Union clearing markets 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 

Having regard to the opinion of the European Central Bank24, 

Having regard to the opinion of the European Economic and Social Committee25, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

Regulation  (EU)  No  648/2012  of  the  European  Parliament  and  of  the  Council26 
contributes  to  the  reduction  of  systemic  risk  by  increasing  the  transparency  of  over-
the-counter  (OTC)  derivatives  market  and  by  reducing  the  counterparty  credit  and 
operational risks associated with OTC derivatives. 

Post-trade infrastructures are a fundamental aspect of the Capital Markets Union and 
are responsible for a range of post-trade processes, including clearing. An efficient and 
competitive  clearing  system  in  the  Union  is  essential  for  the  functioning  of  Union 
capital  markets  and  is  a  cornerstone  of  the  Union’s  financial  stability.  It  is  therefore 
necessary  to  lay  down  further  rules  to  improve  the  efficiency  of  clearing  services  in 
the  Union  in  general,  and  of  central  counterparties  (CCPs)  in  particular,  by 
streamlining procedures, especially for the provision of additional services or activities 
and for changing CCPs’ risk models, by increasing liquidity, by encouraging clearing 
at  Union  CCPs,  by  modernising  the  framework  under  which  CCPs  operate,  and  by 
providing  the  necessary  flexibility  to  CCPs  and  other  financial  actors  to  compete 
within the single market. 

(3) 

To  attract  business,  CCPs  must  be  safe  and  resilient.  Regulation  (EU)  No  648/2012 
lays down  measures to  increase the transparency of derivatives  markets  and mitigate 

24 
25 
26 

[…] 
[…] 
Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC 
derivatives, central counterparties and trade repositories (OJ L 201, 27.7.2012, p. 1). 

EN 

18 

  EN 

                                                 
(4) 

risks  through  clearing  and  the  exchange  of  margin.  In  that  respect,  CCPs  play  an 
important  role  in  mitigating  financial  risks.  Rules  should  therefore  be  laid  down  to 
further enhance the stability of Union CCPs,  notably by  amending certain aspects  of 
the  regulatory  framework.  In  addition,  and  in  recognition  of  Union  CCPs’  role  in 
preserving  the  Union’s  financial  stability,  it  is  necessary  to  strengthen  further  their 
supervision, with particular attention to their role within the broader financial system 
and the fact they provide services across borders.  

Central  clearing  is  a  global  business  and  Union  market  participants  are  active 
internationally. However, since the Commission adopted the proposal for a Regulation 
of  the  European  Parliament  and  of  the  Council  amending  Regulation  (EU)  No 
1095/2010  establishing  a  European  Supervisory  Authority  (European  Securities  and 
Markets  Authority)  and  amending  Regulation  (EU)  No  648/2012  as  regards  the 
procedures  and  authorities  involved  for  the  authorisation  of  CCPs  and  requirements 
for  the  recognition  of  third-country  CCPs  in  201727,  concerns  have  been  expressed 
repeatedly,  including  by  the  European  Securities  and  Markets  Authority  (ESMA)28, 
about  the  ongoing  risks  to  the  Union  financial  stability  arising  from  the  excessive 
concentration of clearing in some third-country CCPs, in particular due to the potential 
risks that can arise in a stress scenario. In the short-term, to mitigate the risk of cliff 
edge  effects  related  to  the  withdrawal  of  the  UK  from  the  Union  due  to  an  abrupt 
disruption of Union market participants’ access to UK CCPs, the Commission adopted 
a  series  of  equivalence  decisions  to  maintain  access  to  UK  CCPs.  However,  the 
Commission called on Union market participants to reduce their excessive exposures 
to systemic CCPs outside the Union in the medium term.  The Commission reiterated 
that  call  in  its  communication  “The  European  economic  and  financial  system: 
fostering openness, strength and resilience”29 in January 2021. The risks and effects of 
excessive exposures to systemic CCPs outside the Union were considered in the report 
published  by  ESMA  in  December  202130  following  an  assessment  conducted  in 
accordance  with  Article  25(2c)  of  Regulation  (EU)  No  648/2012.  That  report 
concluded  that  some  services  provided  by  those  systemically  important  UK  CCPs 
were  of  such  substantial  systemic  importance  that  the  current  arrangements  under 
Regulation  (EU)  No 648/2012  were  insufficient  to  manage  the  risks  to  the  Union 
financial stability. To mitigate the potential financial stability risks to the Union due to 
the continued excessive reliance on systemic third-country CCPs, but also to enhance 
the proportionality of measures for those third-country CCPs that present less risks for 
the  financial  stability  of  the  Union,  it  is  necessary  to  further  tailor  the  framework 
introduced  by  Regulation  (EU)  2019/2099  to  the  risks  presented  by  different  third-
country CCPs.  

(5) 

Article  4(2)  and  Article  11(5)  to  (10)  of  Regulation  (EU)  No  648/2012  exempt 
intragroup transactions from the clearing obligation and the margin requirements.  To 
provide  more  legal  certainty  and  predictability  concerning  the  framework  for 

27 
28 

29 

30 

COM(2017)331. 
ESMA  Report  “Assessment  report  under  Article  25(2c)  of  EMIR  -  Assessment  of  LCH  Ltd  and  ICE 
Clear Europe Ltd”, 16 December 2021, ESMA91-372-1945. 
Communication from the Commission of 19 January 2021 to the European Parliament, the Council, the 
European  Central  Bank,  the  European  Economic  and  Social  Committee  and  the  Committee  of  the 
Regions:  “The  European  economic  and  financial  system:  fostering  openness,  strength  and  resilience” 
(COM(2021) 32 final). 
ESMA  Report  “Assessment  report  under  Article  25(2c)  of  EMIR  -  Assessment  of  LCH  Ltd  and  ICE 
Clear Europe Ltd”, 16 December 2021, ESMA91-372-1945. 

EN 

19 

  EN 

                                                 
intragroup  transactions,  the  equivalence  decisions  in  Article  13  of  that  Regulation 
should  be  replaced  by  a  simpler  framework.  Article  3  of  that  Regulation  should 
therefore  be  amended  to  replace  the  need  for  an  equivalence  decision  with  a  list  of 
third countries  for  which  an exemption  should not  be granted. Consequently, Article 
13  of  that  Regulation  should  be  deleted.  Since  Article  382  of  Regulation  (EU)  No 
575/2013  of  the  European  Parliament  and  of  the  Council31  refers  to  intragroup 
transactions as provided for in Article 3 of Regulation (EU) No 648/2012, that Article 
382 should also be amended accordingly.  

Given the fact that entities that are established in countries that are listed as high-risk 
third  countries  that  have  strategic  deficiencies  in  their  regime  on  anti-money 
laundering and counter terrorist financing, as referred to in Article 9 of Directive (EU) 
2015/849  of the European Parliament  and of the  Council32, or in  third  countries that 
are  listed  in  Annex  I  to  the  Council  conclusions  on  the  revised  EU  list  of  non-
cooperative  jurisdictions  for  tax  purposes33  are  subject  to  a  less  stringent  regulatory 
environment,  their  operations  may  increase  the  risk,  including  due  to  increased 
counterparty credit risk and legal risk, for the Union financial stability. Consequently, 
such  entities  should  not  be  eligible  to  be  considered  in  the  framework  of  intragroup 
transactions.  

Strategic  deficiencies  in  the  regime  on  anti-money  laundering  and  counter  terrorist 
financing, or lack of cooperation for tax purposes are not necessarily the only factors 
that  can  influence  risk,  including  counterparty  credit  risk  and  legal  risk,  associated 
with derivative contracts. Other factors, such as the supervisory framework, also play a 
role.  The  Commission  should  therefore  be  empowered  to  adopt  delegated  acts    to 
identify  the  third  countries  whose  entities  may  not  benefit  from  those  exemptions 
despite  not  being  identified  in  those  lists.  Considering  that  intragroup  transactions 
benefit  from  reduced  regulatory  requirements,  regulators  and  supervisors  should 
carefully  monitor  and  assess  the  risks  associated  with  transactions  involving  entities 
from third countries.  

To  ensure  a  level  playing  field  between  Union  and  third-country  credit  institutions 
offering  clearing  services  to  pension  scheme  arrangements,  an  exemption  from  the 
clearing obligation under Article 4, point (iv), of Regulation (EU) No 648/2012 should 
be  introduced  where  a  Union  financial  counterparty  or  a  non-financial  counterparty 
that  is  subject  to  the  clearing  obligation  enters  into  a  transaction  with  a  pension 
scheme  arrangement  established  in  a  third  country  which  is  exempted  from  the 
clearing obligation under that third country’s national law. 

(6) 

(7) 

(8) 

(9) 

Regulation  (EU) No 648/2012  promotes  the use of central  clearing as the main risk-
mitigation technique for OTC derivatives. The risks associated with an OTC derivative 
contract are therefore best mitigated when that derivative contract is cleared by a CCP 

31 

32 

33 

Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on 
prudential  requirements  for  credit  institutions  and  investment  firms  and  amending  Regulation  (EU) 
No 648/2012 (OJ L 176, 27.6.2013, p. 1). 
Directive  (EU)  2015/849  of  the  European  Parliament  and  of  the  Council  of  20  May  2015  on  the 
prevention  of  the  use  of  the  financial  system  for  the  purposes  of  money  laundering  or  terrorist 
financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and 
repealing  Directive  2005/60/EC  of  the  European  Parliament  and  of  the  Council  and  Commission 
Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73). 
Council  conclusions  on  the  revised  EU  list  of  non-cooperative  jurisdictions  for  tax  purposes  and  the 
Annexes thereto (OJ C 413 I, 12.10.2021, p. 1). 

EN 

20 

  EN 

                                                 
(10) 

(11) 

authorised  under  Article  14  or  recognised  under  Article  25  of  that  Regulation.  It 
follows  that  in  the  calculation  of  the  position  that  is  compared  to  the  thresholds 
specified pursuant to Article 10(4), point (b), of Regulation (EU) No 648/2012, only 
those derivative contracts that are not cleared by a CCP authorised under Article 14 or 
recognised under Article 25 of that Regulation should be includedin that calculation. 

It  is  necessary  to  address  the  financial  stability  risks  associated  with  excessive 
exposures  of  Union  clearing  members  and  clients  to  systemically  important  third-
country CCPs (Tier 2 CCPs) that provide clearing services that have been identified by 
ESMA  as  clearing  services  of  substantial  systemic  importance  pursuant  to  Article 
25(2c)  of  Regulation  (EU)  No 648/2012.  In  December  2021,  ESMA  concluded  that 
the  provision  of  certain  clearing  services  provided  by  two  Tier  2  CCPs,  namely  for 
interest  rate  derivatives  denominated  in  euro  and  Polish  zloty,  Credit  Default  Swaps 
(CDS)  denominated  in  euro  and  Short-Term  Interest  Rate  Derivatives  (STIR) 
denominated in  euro,  are of substantial  systemic importance for the Union or one or 
more  of  its  Member  States.  As  noted  by  ESMA  in  its  December  2021  assessment 
report,  were  those  Tier  2  CCPs  to  face  financial  distress,  changes  to  those  CCPs’ 
eligible  collateral,  margins  or  haircuts  may  negatively  impact  the  sovereign  bond 
markets  of  one  or  more  Member  States,  and  more  broadly  the  Union  financial 
stability.  Furthermore,  disruptions 
in  markets  relevant  for  monetary  policy 
implementation  may  hamper  the  transmission  mechanism  critical  to  central  banks  of 
issue.  It  is  therefore  appropriate  to  require  any  financial  counterparties  and  non-
financial counterparties that  are subject  to  the clearing obligation to  hold,  directly or 
indirectly,  accounts  with  a  minimum    level  of  activity  at  CCPs  established  in  the 
Union.  That  requirement  should  reduce  the  provision  of  those  clearing  services  by 
those Tier 2 CCPs to a level where such clearing is no longer of substantial systemic 
importance.   

It is necessary to ensure that the calibration of the level of the clearing activity to be 
maintained  in  accounts  at  Union  CCPs  can  be  adapted  to  changing  circumstances. 
ESMA has an important role in the assessment of the substantial systemic importance 
of  third-country  CCPs  and  their  clearing  services.  ESMA,  in  cooperation  with  the 
European  Banking  Authority  (EBA),  the  European  Insurance  and  Occupational 
Pensions Authority (EIOPA) and the ESRB, and after having consulted the European 
System of Central Banks (ESCB), should therefore develop draft regulatory technical 
standards specifying the details of the level of substantially systemic clearing services 
to be maintained in the active accounts in Union CCPs by financial and non-financial 
counterparties  subject  to  the  clearing  obligation.  Such  calibration  should  not  go 
beyond  what  is  necessary  and  proportionate  to  reduce  clearing  in  the  identified 
clearing services at Tier 2 CCPs concerned. In that regard, ESMA should consider the 
costs,  risks  and  the  burden  such  calibration  entails  for  financial  and  non-financial 
counterparties,  the  impact  on  their  competitiveness,  and  the  risk  that  those  costs  are 
passed  on  to  non-financial  firms.  Furthermore,  ESMA  should  also  ensure  that  the 
envisaged  reduction  in  clearing  in  those  instruments,  identified  as  of  substantial 
systemic  importance,  results  in  them  no  longer  being  considered  of  substantial 
systemic importance when ESMA reviews the recognition of the relevant CCPs which 
according to Article 25(5) of that Regulation and where such a review should be done 
at  least  every  five  years.  In  addition,  suitable  phase-in  periods  for  the  progressive 
implementation of the requirement to hold a certain level of the clearing activity in the 
accounts at Union CCPs should be foreseen.  

EN 

21 

  EN 

(12)  To ensure that clients are aware of their options and can take an informed decision as 
where  to  clear  their  derivative  contracts,  clearing  members  and  clients  that  provide 
clearing services in both Union and recognised third-country CCPs should inform their 
clients about the option to clear a derivative contract in a Union CCP so that clearing 
in those services identified as of substantial systemic importance is reduced in Tier 2 
CCPs in order to ensure the financial stability of the Union.  

(13)  To  ensure  that  competent  authorities  have  the  necessary  information  on  the  clearing 
activities undertaken by  clearing members or clients in recognised CCPs, a reporting 
obligation should be introduced for such clearing members or clients. The information 
to  be  reported  should  distinguish  between  securities 
transactions,  derivative 
transactions  traded  on  a  regulated  market  and  over-the-counter  (OTC)  derivatives 
transactions. 

(14)  Regulation (EU) 2019/834 of the European Parliament and of the Council34 amended 
Regulation  (EU)  No  648/2012  to  introduce,  inter  alia,  an  exemption  from  reporting 
requirements for  OTC derivative  transactions between counterparties within a group, 
where  at  least  one  of  the  counterparties  is  a  non-financial  counterparty.  That 
exemption  has  been  introduced  because  intragroup  transactions  involving  non-
financial  counterparties  represent  a  relatively  small  fraction  of  all  OTC  derivative 
transactions and are used primarily for internal hedging within groups. As such, those 
transactions  do  not  significantly  contribute  to  systemic  risk  and  interconnectedness 
with  the  rest  of  the  financial  system.  The  exemption  for  those  transactions  from 
reporting  requirements  has,  however,  limited  the  ability  of  ESMA,  the  ESRB  and 
other  authorities  to  clearly  identify  and  assess  the  risks  taken  by  non-financial 
counterparties. To ensure more visibility on intragroup transactions, considering their 
potential  interconnectedness  with  the  rest  of  the  financial  system  and  taking  into 
account recent market developments, in particular strains on energy markets as a result 
of  Russia’s  unprovoked  and  unjustified  aggression  against  Ukraine,  that  exemption 
should be removed. 

(15)  To ensure that competent authorities are at all times aware of exposures at entity and 
group  level  and  are  able  to  monitor  such  exposures,  competent  authorities  should 
establish  effective  cooperation  procedures  to  calculate  the  positions  in  contracts  not 
cleared at an authorised or recognised CCP andto actively evaluate and assess the level 
of exposure in OTC derivative contracts at entity and group level. 

(16) 

It is necessary to ensure that Commission Delegated Regulation (EU) No 149/2013 of 
19  December  2012  supplementing  Regulation  (EU)  No  648/2012  of  the  European 
Parliament  and  of  the  Council35  relating  to  the  criteria  for  establishing  which  OTC 
derivative  contracts  are  objectively  measurable  as  reducing  risks  continues  to  be 
appropriate  in  light  of  market  developments.  It  is  also  necessary  to  ensure  that  the 

34 

35 

Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending 
Regulation  (EU)  No  648/2012  as  regards  the  clearing  obligation,  the  suspension  of  the  clearing 
obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not 
cleared  by  a  central  counterparty,  the  registration  and  supervision  of  trade  repositories  and  the 
requirements for trade repositories (OJ L 141, 28.5.2019, p. 42). 
Commission Delegated Regulation (EU) No 149/2013 of 19 December 2012 supplementing Regulation 
(EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical 
standards  on  indirect  clearing  arrangements,  the  clearing  obligation,  the  public  register,  access  to  a 
trading  venue,  non-financial  counterparties,  and  risk  mitigation  techniques  for  OTC  derivatives 
contracts not cleared by a CCP (OJ L 52, 23.2.2013, p.11).  

EN 

22 

  EN 

                                                 
clearing  thresholds  laid  down  in  that  Commission  Delegated  Regulation  relating  to 
values  of  those  thresholds  properly  and  accurately  reflect  the  different  risks  and 
characteristics  in  derivatives,  other  than  interest  rate,  foreign  exchange,  credit  and 
equity derivatives. ESMA should therefore also review and clarify, where appropriate, 
that Commission Delegated Regulation and propose amending it if necessary. ESMA 
is  encouraged  to  consider  and  provide,  inter  alia,  more  granularity  for  commodity 
derivatives.  That  granularity  could  be  achieved  by  separating  the  clearing  thresholds 
by sector and type, such as differentiating between agriculture, energy or metal related 
commodities  or  differentiating  those  commodities  based  on  other  features  such  as 
environmental, 
sustainable 
investments or crypto-related features. During the review, ESMA should endeavour to 
consult relevant stakeholders that have specific knowledge on particular commodities. 

social  and  governance  criteria,  environmentally 

(17)  Non-financial  counterparties  that  have  to  exchange  collateral  for  OTC  derivative 
contracts  not  cleared  by  a  CCP  should  have  sufficient  time  to  negotiate  and  test  the 
arrangements to exchange such collateral. 

(18)  To  ensure  a  uniform  application  of  the  risk-management  procedures  requiring  the 
timely,  accurate  and  appropriately  segregated  exchange  of  collateral  with  respect  to 
OTC  derivative  contracts  entered  into  by  financial  counterparties  and  non-financial 
counterparties,  the  European  Supervisory  Authorities  (ESAs)  should  take  the 
necessary actions to ensure such uniform application.  

(19)  To  ensure  a  consistent  and  convergent  approach  amongst  competent  authorities 
throughout  the  Union,  authorised  CCPs  or  legal  persons  that  wish  to  be  authorised 
under  Article  14  of  Regulation  (EU)  No  648/2012  to  provide  clearing  services  and 
activities  in  financial  instruments  should  also  be  able  to  be  authorised  to  provide 
clearing  services  and  other  activities  in  relation  to  non-financial  instruments. 
Regulation (EU) No 648/2012 applies to CCPs as entities, and not to specific services, 
as  set  out  in  Article  1(2)  of  that  Regulation.  When  a  CCP  clears  non-financial 
instruments,  in  addition  to  financial  instruments,  the  CCP’s  competent  authority 
should  be  able  to  ensure  that  the  CCP  complies  with  all  requirements  of  Regulation 
(EU) No 648/2012 for all services it offers. 

(20)  Union  CCPs  face  challenges  in  expanding  their  product  offer  and  experience 
difficulties in bringing new products to the market. Those challenges and difficulties 
can  be  explained  by  certain  provisions  of  Regulation  (EU)  No 648/2012  that  render 
some authorisation procedures too long, complex and uncertain in their outcome. The 
process  of  authorising  Union  CCPs  or  extending  their  authorisation  should  therefore 
be  simplified,  while  ensuring  the  appropriate  involvement  of  ESMA  and  the  college 
referred to in Article 18 of Regulation (EU) No 648/2012. First, to avoid significant, 
and potentially indefinite, delays when competent authorities assess the completeness 
of  an  application  for  an  authorisation,  the  competent  authority  should  swiftly 
acknowledge  receipt  of  that  application  and  quickly  verify  whether  the  CCP  has 
provided  the  documents  required  for  the  assessment.  To  ensure  that  Union  CCPs 
submit  all  required  documents  with  their  applications,  ESMA  should  develop  draft 
regulatory and implementing technical standards specifying which documents should 
be  provided,  what  information  those  documents  should  contain  and  in  which  format 
they should be submitted. Second, to ensure an efficient and concurrent assessment of 
applications,  CCPs  should  be  able  to  submit  all  documents  via  a  central  database 
where  they  should  be  shared  instantaneously  with  the  CCP’s  competent  authority, 
ESMA  and  the  college.  Third,  a  CCP’s  competent  authority,  ESMA  and  the  college 
should, during the assessment period, engage and ask the CCP any questions to ensure 

EN 

23 

  EN 

a  swift,  flexible,  and  cooperative  process  for  a  comprehensive  review.  To  avoid 
duplication and unnecessary delays, all questions and subsequent clarifications should 
also be shared simultaneously between the CCP’s competent authority, ESMA and the 
college.  

(21)  There is currently uncertainty as to when an additional service or activity is covered by 
a CCP’s existing authorisation. It is necessary to address that uncertainty and to ensure 
proportionality when the proposed additional service or activity does not increase the 
risks for the CCP. It is therefore necessary to lay down that applications in those cases 
should  not  undergo  the  full  assessment  procedure.  For  that  reason,  it  should  be 
specified  which  additional  clearing  services  and  activities  are  non-material,  and  thus 
do  not  increase  the  risks  for  a  Union  CCP,  and  should  be  approved  through  a  non-
objection procedure by that CCP’s competent authority. That non-objection procedure 
should  be  applied  where  the  CCP  intends  to  clear  one  or  more  financial  instruments 
belonging to the same classes of financial instruments for which it has been authorised 
to clear, provided such financial instruments are traded on a trading venue for which 
the  CCP  already  provides  clearing  services  or  performs  activities  and  the  proposed 
additional clearing service or activity does not involve a payment in a new currency. 
That non-objection procedure should also be applied where the CCP adds a new Union 
currency  in  a  class  of  financial  instruments  already  covered  by  the  CCP’s 
authorisation,  or  where  the  CCP  adds  one  or  more  additional  tenors  to  a  class  of 
financial  instruments  already  covered  by  the  CCP’s  authorisation  provided  that  the 
maturity range is not significantly extended. In addition, a CCP should also be able to 
ask its competent authority for the non-objection procedure to apply where  that CCP 
considers that the proposed additional service or activity would not increase its risks, 
in  particular  where  the  new  clearing  service  or  activity  is  similar  to  the  services  the 
CCP is already authorised to provide. The non-objection procedure should not require 
a  separate  opinion  from  ESMA  and  the  college  since  such  requirement  would  be 
disproportionate. Instead, ESMA and the college should be able to provide input to the 
CCP’s  competent  authority  through  the  joint  supervisory  team  established  for  that 
CCP. 

(22)  To foster a cooperative supervision of CCPs on an ongoing basis, the college should 
issue  an  opinion  where  a  competent  authority  considers  withdrawing  a  CCP’s 
authorisation  and  when  a  competent  authority  conducts  the  annual  review  and 
evaluation of that CCP.  

(23)  To ensure the consistent functioning of all colleges and to further enhance supervisory 
convergence,  ESMA  should  manage  and  chair  the  college  for  each  Union  CCP  and 
should be granted the right to vote in that college. 

(24)  ESMA should be able to contribute more effectively to ensuring that Union CCPs are 
safe,  robust  and  competitive  in  providing  their  services  throughout  the  Union. 
Therefore,  ESMA  should,  in  addition  to  the  supervisory  competences  currently  laid 
down in Regulation (EU) No 648/2012, also issue an opinion to the CCP’s competent 
authority  about  a  CCP’s  annual  review  and  evaluation,  the  withdrawal  of  its 
authorisation and margin requirements. When issuing an opinion, ESMA should assess 
a  CCP’s  compliance  with  the  applicable  requirements,  focusing  in  particular  on 
identified  cross-border  risks  or  risks  to  the  financial  stability  of  the  Union.  It  is  also 
necessary  to  further  enhance  supervisory  convergence  and  to  ensure  that  all 
stakeholders  are  informed  of  ESMA’s  and  the  college’s  assessment  of  a  CCP’s 
activities.  ESMA  should  therefore  disclose,  taking  into  account  the  need  to  protect 
confidential information, the fact that a competent authority does not comply or does 

EN 

24 

  EN 

(25) 

not intend to comply with its opinion or the opinion of the college and any conditions 
or recommendations  included therein. ESMA should  be able to decide, on a case by 
case  basis,  to  publish  the  reasons  provided  by  the  competent  authority  for  not 
complying  with  the  ESMA  opinion  or  the  college  opinion  or  any  conditions  or 
recommendations contained therein. 

It is necessary to ensure that the CCP complies with Regulation (EU) No 648/2012 on 
an ongoing basis, including after a non-objection procedure approving the provision of 
additional  clearing  services  or  activities,  or  after  a  non-objection  procedure  for  the 
validation  of  a  model  change  in  which  cases  ESMA  and  the  college  do  not  issue  a 
separate opinion. The review conducted by the competent authority of the CCP at least 
on an annual basis should therefore in particular consider such new clearing services 
or  activities  and  any  model  changes.  To  ensure  supervisory  convergence  and  that 
Union  CCPs  are  safe,  robust  and  competitive  in  providing  their  services  throughout 
the  Union,  the  report  of  the  competent  authority  should  be  subject  to  an  opinion  by 
ESMA and the college and should be submitted every year. 

(26)  ESMA  should  have  the  means  to  identify  potential  risks  to  the  Union’s  financial 
stability. ESMA should therefore, in cooperation with the EBA, EIOPA, and the ECB 
in  the  framework  of  the  tasks  concerning  the  prudential  supervision  of  credit 
institutions within the single supervisory mechanism conferred upon it in accordance 
with  Council  Regulation  (EU)  No  1024/201336,  identify  the  interconnections  and 
interdependencies between different CCPs and legal persons, including shared clearing 
members,  clients  and  indirect  clients,  shared  material  service  providers,  shared 
material  liquidity  providers,  cross-collateral  arrangements,  cross-default  provisions 
and  cross-CCP  netting,  cross-guarantee  agreements  and  risks  transfers  and  back-to-
back trading arrangements. 

(27)  The central banks of issue of the Union currencies of the financial instruments cleared 
by  authorised  CCPs  that  have  requested  membership  of  the  CCP  Supervisory 
Committee  are  non-voting  members  of  that  committee.  They  only  participate  to  its 
meetings  for  Union  CCPs  in  the  context  of  discussions  about  the  Union-wide 
assessments  of  the  resilience  of  those  CCPs  to  adverse  market  developments  and 
relevant  market  developments.  Contrary  to  their  involvement  in  the  supervision  of 
third-country  CCPs,  central  banks  of  issue  are  thus  insufficiently  involved  on 
supervisory  matters  for  Union  CCPs  that  are  of  direct  relevance  to  the  conduct  of 
monetary  policy  and  the  smooth  operation  of  payments  systems,  which  leads  to 
insufficient  consideration  of  cross-border  risks.  It  is  therefore  appropriate  that  those 
central  banks  of  issue  are  able  to  attend  as  non-voting  members  all  meetings  of  the 
CCP Supervisory Committee when it convenes for Union CCPs. 

(28) 

It  is  necessary  to  ensure  a  prompt  exchange  of  information,  knowledge  sharing  and 
effective cooperation between the authorities involved in the supervision of authorised 
CCPs,  and  in  particular  where  a  swift  decision  by  a  CCP’s  competent  authority  is 
required. It is therefore appropriate to set up a joint supervisory team for each Union 
CCP to assist those supervisory authorities, including by providing input to the CCP’s 
competent authority within the context of the non-objection procedure for extending a 
CCP’s  existing  authorisation,  assisting  in  establishing  the  frequency  and  depth  of  a 
CCP’s review and evaluation, and participating to on-site inspections. Considering that 
a CCP’s competent authority remains  ultimately  responsible for the final supervisory 

36 

[…] 

EN 

25 

  EN 

                                                 
decisions,  the  joint  supervisory  teams  should  work  under  the  auspices  of  the  CCP’s 
competent authority for which the team is established and should be composed of staff 
members  from  the  CCP’s  competent  authority,  ESMA  and  certain  members  of  the 
college.  Other  members  of  the  college  should  also  be  able  to  request  to  participate 
justifying the request based on their assessment of the impact that the CCP's financial 
distress could have on the financial stability of their respective Member State. 

(29)  To enhance the ability of relevant Union bodies to have a comprehensive overview of 
market  developments  relevant  for  clearing in  the Union, monitor the implementation 
of  certain  clearing  related  requirements  of  Regulation  (EU)  No 648/2012  and 
collectively discuss the potential risks arising from the interconnectedness of different 
financial  actors  and  other  issues  related  to  the  financial  stability  it  is  necessary  to 
establish a cross-sectoral monitoring mechanism bringing together the relevant Union 
bodies involved in the supervision of Union CCPs, clearing members and clients. Such 
Joint Monitoring Mechanism should be managed and chaired by ESMA as the Union 
authority  involved  in  the  supervision  of  Union  CCPs  and  supervising  systemically 
important third-country CCPs. Other participants should include representatives from 
the Commission, the EBA, EIOPA, the ESRB, the ECB and the ECB in the framework 
of  the  tasks  concerning  the  prudential  supervision  of  credit  institutions  within  the 
single  supervisory  mechanism  conferred  upon  it  in  accordance  with  Council 
Regulation (EU) No 1024/2013.  

(30)  To  inform  future  policy  decisions,  ESMA,  in  cooperation  with  the  other  bodies 
participating  in  the  Joint  Monitoring  Mechanism,  should  submit  an  annual  report  to 
the  European  Parliament,  the  Council  and  the  Commission  on  the  results  of  their 
activities. ESMA might institute a breach of Union law procedure pursuant to Article 
17  of  Regulation  (EU)  No 1095/2010  of  the  European  Parliament  and  of  the 
Council37,where,  on  the  basis  of  the  information  received  as  part  of  the  Joint 
Monitoring  Mechanism  and  following  the  discussions  held  therein,  ESMA  considers 
that  competent  authorities  fail  to  ensure  clearing  members’  and  clients’  compliance 
with the requirement to clear at least a  proportion of identified contracts at accounts at 
Union CCPs, or where ESMA identifies a risk to the financial stability of the Union 
due  to  an  alleged  breach  or  non-application  of  Union  law.  Before  instituting  such 
breach of Union law procedure, ESMA might issue guidelines and recommendations 
pursuant  to  Article  16  of  that  Regulation.  Where,  on  the  basis  of  the  information 
received as part of the Joint Monitoring Mechanism and following the discussions held 
therein,  ESMA  considers  that  compliance  with  the  requirement  to  clear  at  least  a  
proportion  of  identified  contracts  at  accounts  at  Union  CCPs  does  not  effectively 
ensure  the  reduction  of  Union  clearing  members’  and  clients’  excessive  exposure  to 
Tier  2  CCPs,  it  should  review  and  propose  amending  the  relevant  Commission 
Delegated  Regulation  specifying  further  that  requirement,  proposing  to  set,  where 
necessary, an appropriate adaptation period.  

(31)  The  2020  market  turmoil  as  a  result  of  the  Covid-19  pandemic  and  the  2022  high 
prices  on  energy  wholesale  markets  following  Russia’s  unprovoked  and  unjustified 
aggression against Ukraine showed that, while it is essential for competent authorities 
to  cooperate  and  exchange  information  to  address  ensuing  risks  when  events  with 

37 

Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 
establishing a European Supervisory Authority (European Securities and Markets Authority), amending 
Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 
84). 

EN 

26 

  EN 

                                                 
cross-border  impacts  emerge,  ESMA  still  lacks  the  necessary  tools  to  ensure  such 
coordination  and  a  convergent  approach  at  Union  level.  ESMA  should  therefore  be 
able  to  convene  meetings  of  the  CCP  Supervisory  Committee,  either  on  its  own 
initiative  or  upon  request,  potentially  with  an  enlarged  composition,  to  coordinate 
effectively  competent  authorities’  responses  in  emergency  situations.  ESMA  should 
also be able to ask, by simple request, information from market participants  which is 
necessary for ESMA to perform its coordination function in those situations and to be 
able to issue recommendations to the competent authority.  

(32)  To  reduce  the  burden  on  CCPs  and  ESMA,  it  should  be  clarified  that  where  ESMA 
undertakes  a  review  of  a  third-country  CCP’s  recognition  pursuant  to  Article  25(5), 
first subparagraph, point (b), that third-country CCP should not be obliged to submit a 
new  application  for  recognition.  It  should,  however,  provide  ESMA  with  all 
information  necessary  for  such  review.  Consequently,  ESMA's  review  of  a  third-
country CCP’s recognition should not constitute a new recognition of that CCP.  

(33)  The Commission should be able, when adopting an equivalence decision, to waive the 
requirement  for  that  third  country  to  have  an  effective  equivalent  system  for  the 
recognition  of third-country CCPs.  In considering where such an  approach would be 
proportionate, the Commission  might consider  a range of different  factors, including 
compliance with  the Principles for  Financial Market  Infrastructures published by the 
Committee on Payments and Market Infrastructures and the International Organisation 
of  Securities  Commissions,  the  size  of  the  third-country  CCPs  established  in  that 
jurisdiction  and,  where  known,  the  expected  activity  in  these  third-country  CCPs  by 
clearing members and trading venues established in the Union. 

(34)  To ensure that cooperation arrangements between ESMA and the relevant competent 
authorities  of  third  countries  are  proportionate,  such  arrangements  should  reflect  the 
specific features of the scope of services provided, or intended to be provided, within 
the Union by CCPs authorised in that third-country and whether those services entail 
specific  risks  to  the  Union  or  to  one  or more  of  its Member  States.  The  cooperation 
arrangements should therefore reflect the degree of risk that the CCPs established in a 
third  country  potentially  present  to  the  financial  stability  of  the  Union  or  of  one  or 
more of its Member States. 

(35)  ESMA should  therefore  tailor its cooperation arrangements to  different  third-country 
jurisdictions based on the CCPs established in the respective jurisdiction. In particular, 
Tier  1  CCPs  cover  a  wide  range  of  CCP  profiles  hence  ESMA  should  ensure  that  a 
cooperation  arrangement  is  proportionate  to  the  CCPs  established  in  each  third-
country  jurisdiction.  ESMA  should  consider,  amongst  others,  the  liquidity  of  the 
markets concerned, the degree to which the CCPs’ clearing activities are denominated 
in  euro  or  other  Union  currencies  and  the  extent  to  which  Union  entities  use  the 
services  of  such  CCPs.  Considering  that  the  vast  majority  of  Tier  1  CCPs  provide 
clearing  services  to  a  limited  extent  to  clearing  members  and  trading  venues 
established  in  the  Union,  ESMA’s  scope  of  assessment  and  information  to  be 
requested  should  also  be  limited  in  all  those  jurisdictions.  To  limit  information 
requests  for  Tier  1  CCPs,  a  pre-defined  range  of  information  should  in  principle  be 
requested by ESMA annually. Where the risks from a Tier 1 CCP or jurisdiction are 
potentially  greater,  more,  and  at  least  quarterly,  requests  and  a  wider  scope  of 
information requested would be justified. However, any cooperation arrangements in 
place  when  this  Regulation  enters  into  force  should  not  be  required  to  be  adjusted 
unless the relevant third-country authorities so request. 

EN 

27 

  EN 

(36)  Where recognition is provided under Article 25(2b) of Regulation (EU) No 648/2012, 
considering that those CCPs are of systemic importance for the Union or one or more 
of its Member States, the cooperation arrangements between ESMA and the relevant 
third-country authorities should cover the exchange of information for a broader range 
of  information  and  with  increased  frequency.  In  that  case,  the  cooperation 
arrangements should also entail procedures to ensure such a Tier 2 CCP is supervised 
pursuant  to  Article  25  of  that  Regulation.  ESMA  should  ensure  it  can  obtain  all 
information necessary to fulfil its duties under that Regulation, including  information 
necessary to  ensure  compliance with  Article 25(2b)  of that Regulation  and  to  ensure 
that  information  is  shared  where  a  CCP  has  been  granted,  partially  or  fully, 
comparable compliance.  To enable ESMA to  carry out full and effective supervision 
of  Tier  2  CCPs,  it  should  be  clarified  that  those  CCPs  should  provide  ESMA  with 
information periodically. 

(37)  To ensure that ESMA is also informed about how a Tier 2 CCP is prepared for, can 
mitigate  and  recover  from  financial  distress,  the  cooperation  arrangements  should 
include the right for ESMA to be informed where a Tier 2 CCP establishes a recovery 
plan or where a third-country authority establishes resolution plans. ESMA should also 
be informed on the aspects relevant for the financial stability of the Union, or of one or 
more of its Member States, and on how individual clearing members, and to the extent 
known clients and indirect clients, could be materially affected by the implementation 
of  such  a  recovery  or  resolution  plan.  The  cooperation  arrangements  should  also 
indicate  that  ESMA  should  be  informed  when  a  Tier  2  CCP  intends  to  activate  its 
recovery  plan  or  where  the  third-country  authorities  have  determined  that  there  are 
indications of an emerging crisis situation that could affect the operations of the CCP, 
its clearing members, clients and indirect clients. 

(38)  To mitigate potential risks for the financial stability of the Union, or of one or more of 
its  Member  States,  CCPs  and  clearing  houses  should  not  be  allowed  to  be  clearing 
members  of  other  CCPs  nor  should  CCPs  be  able  to  accept  to  have  other  CCPs  as 
clearing members or indirect clearing members.  

illustrate 

the  fact 

(39)  The  recent  events  on  commodity  markets  as  a  result  of  Russia’s  unprovoked  and 
unjustified  aggression  against  Ukraine 
that  non-financial 
counterparties  do  not  have  the  same  access  to  liquidity  as  financial  counterparties. 
Therefore, non-financial counterparties should not be  allowed to offer client clearing 
services  and  should  be  only  allowed  to  keep  accounts  at  the  CCP  for  assets  and 
positions  held  for  their  own  account.  Where  a  CCP  has  or  intends  to  accept  non-
financial  counterparties  as  clearing  members  that  CCP  should  ensure  that  the  non-
financial  counterparties  can  fulfil  the  margin  requirements  and  default  funds 
contributions, 
conditions.  Considering  non-financial 
counterparties  are  not  subject  to  the  same  prudential  requirements  and  liquidity 
safeguards as financial counterparties, their direct access to CCPs should be monitored 
by  the  competent  authorities  of  CCPs  accepting  them  as  clearing  members.  .  The 
competent authority for the CCP should report to ESMA and the college on a regular 
basis  on  the  appropriateness  of  accepting  non-financial  counterparties  as  clearing 
members. ESMA might issue an opinion on the appropriateness of such arrangements 
following an ad-hoc peer review.  

including 

stressed 

in 

(40)  To ensure clients and indirect clients have better visibility and predictability of margin 
calls, and thus further develop their liquidity management strategies, clearing members 
and  clients  providing  clearing  services  should  ensure  transparency  towards  their 
clients.  Due  to  their  closer  relationship  with  CCPs  and  their  professional  experience 

EN 

28 

  EN 

with  central  clearing and liquidity management, clearing members are best  placed to 
communicate  in  a  clear  and  transparent  manner  to  clients  how  CCP  models  work, 
including in  stress  events, and  the implications  such events  can have on  the margins 
clients  are  requested  to  post,  including  any  additional  margin  clearing  members 
themselves  may  ask.  A  better  understanding  of  CCP  margin  models  can  improve 
clients’ ability to reasonably predict margin calls and prepare themselves for collateral 
requests, particularly in stress events. 

(41)  To  ensure  that  margin  models  reflect  current  market  conditions,  CCPs  should 
continuously  and  not  only  regularly  revise  the  level  of  their  margins  taking  into 
account  any  potentially  procyclical  effects  of  such  revisions.  When  calling  and 
collecting  margins  on  an  intraday  basis,  CCPs  should  further  consider  the  potential 
impact of their intraday margin  collections and payments on the liquidity position of 
their participants. 

(42)  To  ensure  the  liquidity  risk  is  accurately  defined,  the  entities  whose  default  a  CCP 
should take into account to determine such risk should be expanded to cover not only 
the  default  of  clearing  members  but  also  of  liquidity  service  providers,  settlement 
service providers or any other service providers. 

(43)  To facilitate access to clearing to those entities that do not hold sufficient amounts of 
highly  liquid  assets  and  in  particular  energy  companies,  under  conditions  to  be 
specified  by  ESMA  and  to  ensure  a  CCP  takes  those  conditions  into  account  when 
calculating its overall exposure to a bank that is also a clearing member, commercial 
bank and public bank guarantees should be considered eligible collateral. In addition, 
given  their  low  credit  risk  profile,  it  should  be  explicitly  specified  that  public 
guarantees  are  also  eligible  as  collateral.  Finally,  a  CCP  should,  when  revising  the 
level  of  the  haircuts  it  applies  to  the  assets  it  accepts  as  collateral,  take  into  account 
any potential procyclical effects of such revisions.  

(44)  To  facilitate  CCPs’  ability  to  respond  promptly  to  market  developments  that  may 
require amendments to  their risk models,  the process  of the validation of changes to 
such models should be simplified. Where a change is non-significant, a non-objection 
validation  procedure  should  apply.  To  ensure  supervisory  convergence,  Regulation 
(EU) No 648/2012 should specify the changes that should be considered as significant. 
This  should be the case where  certain  conditions would be met referring  to  different 
aspects of the CCP’s financial position and overall risk level. 

(45)  Regulation (EU) No 648/2012 should be reviewed  no later than 5 years after the date 
of  entry  into  force  of  this  Regulation.  This  should  allow  time  to  apply  the  changes 
introduced by this Regulation. Whilst a review of Regulation (EU) No 648/2012 in its 
entirety  should  be  carried  out,  that  review  should  focus  on  the  effectiveness  and 
efficiency of that Regulation in meeting its aims, improving the efficiency and safety 
of Union clearing markets and preserving financial stability of the Union. The review 
should also consider the attractiveness of  Union CCPs, the impact of this Regulation 
on  encouraging  clearing  in  the  Union,  and  the  extent  to  which  the  enhanced 
assessment and management of cross-border risks have benefited the Union.   

(46)  To ensure consistency of Regulation (EU) 2017/1131 of the European Parliament and 
of the Council38  with Regulation (EU) No 648/2012 and to preserve the integrity and 

38 

Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money 
market funds (OJ L 169, 30.6.2017, p. 8). 

EN 

29 

  EN 

                                                 
stability  of  the  internal  market,  it  is  necessary  to  lay  down  in  Regulation  (EU) 
2017/1131  a  uniform  set  of  rules  to  address  counterparty  risk  in  financial  derivative 
transactions  performed  by  money  market  funds  (MMF),  when  the  transactions  have 
been  cleared  by  a  CCP  that  is  authorised  or  recognised  under  Regulation  (EU)  No 
648/2012. As central clearing arrangements mitigate counterparty risk that is inherent 
in  financial  derivative  contracts,  it  is  necessary  to  take  into  consideration  whether  a 
derivative has been centrally cleared by a CCP that is authorised or recognised under 
that  Regulation,  when  determining  the  applicable  counterparty  risk  limits.  It  is  also 
necessary  for  regulatory  and  harmonisation  purposes,  to  lift  counterparty  risk  limits 
only  where  the  counterparties  use  CCPs  which  are  authorised  or  recognised  in 
accordance with that Regulation, to provide clearing services to clearing members and 
their clients. 

(47)  To ensure consistent harmonisation of rules and  supervisory  practice on  applications 
for authorisation, extension of authorisation and model validations the active account 
requirement  and  the  CCP  participation  requirements,  the  Commission  should  be 
empowered to  adopt  regulatory technical  standards  developed by ESMA  with  regard 
to  the  following:  the  documents  CCPs  are  required  to  submit  when  applying  for 
authorisation,  extension  of  authorisation  and  validation  of  model  changes;  the 
proportion of activity in the relevant derivative contracts that should be held in active 
accounts at Union CCPs and the calculation methodology to be used to calculate that 
proportion;  the  scope  and  details  of  the  reporting  by  Union  clearing  members  and 
clients  to  their competent  authorities on their clearing activity in  third-country CCPs 
and whilst providing the mechanisms triggering a review of the values of the clearing 
thresholds  following  significant  price  fluctuations  in  the  underlying  class  of  OTC 
derivatives to also review the scope of the hedging exemption and thresholds for the 
clearing obligation to apply; and the elements to be considered when laying down the 
admission criteria to a CCP. The Commission should adopt those regulatory technical 
standards  by  means  of  delegated  acts  pursuant  to  Article  290  of  the  Treaty  on  the 
Functioning of the European Union (TFEU) and in accordance with Articles 10 to 14 
of Regulation (EU) No 1095/2010. 

(48)  To  ensure  uniform  conditions  for  the  implementation  of  this  Regulation,  the 
Commission  should  also  be  empowered  to  adopt  implementing  technical  standards 
developed  by  ESMA  with  regard  to  the  format  of  the  required  documents  for 
applications and the format of the reporting by Union clearing members and clients to 
their  competent  authorities  on  their  clearing  activity  in  third-country  CCPs.  The 
Commission  should  adopt  those  implementing  technical  standards  by  means  of 
implementing acts pursuant to Article 291 TFEU and in accordance with Article 15 of 
Regulation (EU) No 1095/2010. 

(49)  To  ensure  the  list  of  third  countries  whose  entities  may  not  benefit  from  those 
exemptions despite not being identified in those lists is relevant for the objectives of 
Regulation (EU) No 648/2012, to ensure the consistent harmonisation of the obligation 
to  clear  certain  transactions  in  an  account  with  an  authorised  CCP  where  ESMA 
undertakes  an  assessment  pursuant  to  Article  25(2c)  and  to  ensure  the  list  of  non-
material changes for the non-objection procedure to apply remains relevant, the power 
to adopt acts in accordance with Article 290 of the TFEU should be delegated to the 
Commission to adjust the transactions in scope of the obligation and to change the list 
of non-material changes. It is of particular importance that the Commission carry out 
appropriate  consultations  during  its  preparatory  work,  including  at  expert  level,  and 
that those consultations be conducted in  accordance with  the principles  laid  down in 

EN 

30 

  EN 

the  Interinstitutional  Agreement  of  13  April  2016  on  Better  Law-Making39.  In 
particular,  to  ensure  equal  participation  in  the  preparation  of  delegated  acts,  the 
European  Parliament  and  the  Council  receive  all  documents  at  the  same  time  as 
Member  States'  experts,  and  their  experts  systematically  have  access  to  meetings  of 
Commission expert groups dealing with the preparation of delegated acts  

(50)  Since the objectives of this Regulation, namely to increase the safety and efficiency of 
Union CCPs by improving their attractiveness, encouraging clearing in the Union and 
enhancing  the  cross-border  consideration  of  risks  cannot  be  sufficiently  achieved  by 
the  Member  States  but  can  rather,  by  reason  of  their  scale  and  effects,  be  better 
achieved  at  Union  level,  the  Union  may  adopt  measures,  in  accordance  with  the 
principle  of  subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In 
accordance  with  the  principle  of  proportionality,  as  set  out  in  that  Article,  this 
Regulation does not go beyond what is necessary in order to achieve those objectives. 

(51) 

 Regulations  (EU)  No  648/2012,  (EU)  No  575/2013  and  (EU)  2017/1131  should 
therefore be amended accordingly. 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Amendments to Regulation (EU) No 648/2012 

Regulation (EU) No 648/2012 is amended as follows: 

(1)  Article 3 is replaced by the following: 

‘Article 3 

Intragroup transactions 

1. 

2. 

(a) 

In relation to a non-financial counterparty, an intragroup transaction shall be an OTC 
derivative contract entered into with another counterparty which is part of the same 
group provided that both counterparties are included in the same consolidation on a 
full  basis  and  they  are  subject  to  an  appropriate  centralised  risk  evaluation, 
measurement  and  control  procedures  and  that  counterparty  is  established  in  the 
Union or, if it is established in a third country that third country is not listed pursuant 
to paragraphs 4 and 5. 

In relation  to  a financial counterparty, an intragroup transaction  shall be  any of the 
following: 

an  OTC  derivative  contract  entered  into  with  another  counterparty  which  is  part  of 
the same group, provided that all of the following conditions are met: 

(a) 

(b) 

the financial counterparty is established in the Union or, if it is established in a 
third country, that third country is not listed pursuant to paragraphs 4 and 5;  

the other counterparty is a financial counterparty, a financial holding company, 
a  financial  institution  or  an  ancillary  services  undertaking  subject  to 
appropriate prudential requirements; 

(c) 

both counterparties are included in the same consolidation on a full basis; 

39 

OJ L 123, 12.5.2016, p. 1. 

EN 

31 

  EN 

                                                 
(b) 

(c) 

(d) 

(d)  both  counterparties  are  subject  to  appropriate  centralised  risk  evaluation, 

measurement and control procedures; 

an  OTC  derivative  contract  entered  into  with  another  counterparty  where  both 
counterparties  are  part  of  the  same  institutional  protection  scheme,  referred  to  in 
Article 113(7) of Regulation (EU) No 575/2013, provided that the condition set out 
in point (a)(ii) of this paragraph is met; 

an  OTC  derivative  contract  entered  into  between  credit  institutions  affiliated  to  the 
same central body or between such credit institution and the central body, as referred 
to in Article 10(1) of Regulation (EU) No 575/2013; 

an OTC derivative  contract  entered into  with  a non-financial  counterparty  which is 
part of the same group, provided both the following conditions are met: 

(a) 

both  counterparties  to  the  derivative  contract  are  included  in  the  same 
consolidation on a full basis and are subject to an appropriate centralised risk 
evaluation, measurement and appropriate control procedures; 

(b) 

 the non-financial counterparty is established in the Union or, if it is established 
in a third-country, that third country is not listed under paragraphs 4 and 5. 

3. 

For  the  purposes  of  this  Article,  counterparties  shall  be  considered  included  in  the 
same consolidation when they are both any of the following: 

(a) 

included  in  a  consolidation  in  accordance  with  Directive  2013/34/EU  or 
International  Financial  Reporting  Standards  (IFRS)  adopted  pursuant 
to 
Regulation (EC) No 1606/2002 or, in relation to a group the parent undertaking of 
which has its head office in a third country, in accordance with generally accepted 
accounting  principles  of  a  third  country  determined  to  be  equivalent  to  IFRS  in 
accordance with Regulation (EC) No 1569/2007 or accounting standards of a third 
country  the  use  of  which  is  permitted  in  accordance  with  Article  4  of  that 
Regulation; 

(b) 

covered  by  the  same  consolidated  supervision  in  accordance  with  Directive 
2013/36/EU or, in relation to a group the parent undertaking of which has its head 
office  in  a  third  country,  the  same  consolidated  supervision  by  a  third-country 
competent authority verified as equivalent to that governed by the principles laid 
down in Article 127 of Directive 2013/36/EU. 

4. 

For the purposes of this Article, transactions with counterparties established in any of 
the  following  third  countries  shall  not  benefit  from  any  of  the  exemptions  for 
intragroup transactions: 

(a)  where  the  third  country  is  listed  as  a  high-risk  third  country  that  has  strategic 
deficiencies  in  its  regime  on  anti-money  laundering  and  counter  terrorist 
financing,  in  accordance  with  Article  9  of  Directive  (EU)  2015/849  of  the 
European Parliament and of the Council*1;  

(b)  where  the  third  country  is  listed  in  Annex  I  to  the  Council  conclusions  on  the 
revised  EU  list  of  non-cooperative  jurisdictions  for  tax  purposes*2  and  their 
subsequent  updates which are specifically  approved twice  a  year, customarily in 
February  and  October,  and  published  in  series  C  of  the  Official  Journal  of  the 
European Union. 

EN 

32 

  EN 

5.   Where  appropriate  in  the  light  of  the  legal,  supervisory  and  enforcement 
arrangements of a third country with regard to risks, including counterparty credit 
risk  and  legal  risk,  the  Commission  is  empowered  to  adopt  delegated  acts  in 
accordance  with  Article  82  to  supplement  this  Regulation  to  identify  the  third 
countries  whose  entities  may  not  benefit  from  any  of  the  exemptions  for 
intragroup transactions despite not being listed pursuant to paragraph 4. 

___________________________________________________ 

*1 

Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on 

the prevention of the use of the financial system for the purposes of money laundering or 

terrorist  financing,  amending  Regulation  (EU)  No  648/2012  of  the  European  Parliament 

and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of 

the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).’ 

*2 

Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes 

and the Annexes thereto (OJ C 413 I, 12.10.2021, p. 1).; 

(2) 

 in Article 4(1), the following subparagraph is added: 

‘The  obligation  to  clear  all  OTC  derivative  contracts  does  not  apply  to  contracts 
concluded in situations as referred to in the first subparagraph, point (a)(iv), between, on 
one  side,  a  financial  counterparty  that  meets  the  conditions  set  out  in  Article  4a(1), 
second subparagraph, or a non-financial counterparty that meets the conditions set out 
in  Article  10(1),  second  subparagraph,  and,  on  the  other  side,  a  pension  scheme 
arrangement established in  a third country and operating on a national  basis, provided 
that such entity or arrangement is authorised, supervised and recognised under national 
law  and  where  its  primary  purpose  is  to  provide  retirement  benefits  and  is  exempted 
from the clearing obligation under its national law.’;  

(3) 

in Article 4a(3), the first subparagraph is replaced by the following:  

‘In calculating the positions referred to in paragraph 1, the financial counterparty shall 
include  all  OTC  derivative  contracts  that  are  not  cleared  in  a  CCP  authorised  under 
Article 14 or recognised under Article 25, entered into by that financial counterparty or 
entered  into  by  other  entities  within  the  group  to  which  that  financial  counterparty 
belongs.’;  

(4) 

the following Articles 7a and 7b are inserted: 

‘Article 7a 

Active Account 

1. 
Financial  counterparties  or  a  non-financial  counterparties  that  are  subject  to  the 
clearing obligation in accordance with Articles 4a and 10 and clear any of the categories 
of the derivative contracts referred to in paragraph 2 shall clear at least a proportion of 
such contracts at accounts at CCPs authorised under Article 14. 

The  categories  of  derivative  contracts  subject  to  the  obligation  referred  to  in 

2. 
paragraph 1 shall be any of the following: 

(a) 

interest rate derivatives denominated in euro and Polish zloty; 

(b)  Credit Default Swaps (CDS) denominated in euro; 

(c)  Short-Term Interest Rate Derivatives (STIR) denominated in euro. 

EN 

33 

  EN 

3.  A  financial  counterparty  or  a  non-financial  counterparty  that  is  subject  to  the 
obligation  set  out  in  paragraph  1  shall  calculate  its  activities  in  the  categories  of 
derivative contracts referred to in paragraph 1 at CCPs authorised under Article 14.  

4.  A  financial  counterparty  or  a  non-financial  counterparty  that  is  subject  to  the 
obligation set out in paragraph 1 shall report to the competent authority of the CCP or 
CCPs  it  uses  the  outcome  of  the  calculation  referred  to  in  paragraph  2  on  an  annual 
basis,  confirming  their  compliance  with  the  obligation  set  out  in  that  paragraph.  The 
CCP’s  competent  authority  shall  immediately  transmit  that  information  to  ESMA  and 
the Joint Monitoring Mechanism referred to in Article 23c. 

ESMA shall, in cooperation with the EBA, EIOPA and ESRB and after consulting 

5. 
the ESCB, develop draft regulatory technical standards specifying: 

(a) 

the proportion of activity in each category of the derivative contracts referred to in 
paragraph  2;  that  proportion  shall  be  set  at  a  level  that  results  in  a  reduction  in 
clearing  in  those  derivative  contracts  at  those  Tier  2  CCPs  offering  services  of 
substantial systemic importance for the financial stability of the Union or one or 
more of its Member States pursuant to Article 25(2c) and that ensures clearing in 
such derivative contracts is no longer of substantial systemic importance;   

(b) 

the methodology for calculation  under paragraph 3.  

ESMA shall submit those draft regulatory technical standards to the Commission by … 
[PO:  please  insert  the  date  =  12  months  after  the  date  of  entry  into  force  of  this 
Regulation]. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation 
(EU) No 1095/2010. 

6. 
Where ESMA undertakes an assessment pursuant to Article 25(2c) and concludes that 
certain services or activities provided by Tier 2 CCPs are of substantial systemic importance 
for  the  Union  or  one  or  more  of  its  Member  States  or  that  services  or  activities  that  were 
previously identified by ESMA as being of substantial systemic importance for the Union or 
one  or  more  of  its  Member  States  no  longer  are,  the  Commission  is  empowered  to  adopt  a 
delegated act to amend paragraph 2 accordingly, in accordance with Article 82.  

Article 7b 

Information on clearing services  

1. 
Clearing  members  and  clients  that  provide  clearing  services  both  at  a  CCP 
authorised under Article 14 and at a CCP recognised under Article 25 shall, when one of 
their  clients  submits  a  contract  for  clearing,  inform  that  client  about  the  possibility  to 
clear such contract at the CCP authorised under Article 14. 

Clearing  members  and  clients  that  are  established  in  the  Union  or  are  part  of  a 
2. 
group  subject  to  consolidated  supervision  in  the  Union  and  that  clear  in  a  CCP 
recognised under Article 25, shall report to their competent authority the scope of their 
clearing activity in such CCP on an annual basis, specifying all of the following: 

(a) 

the type of financial instruments or non-financial contracts cleared; 

(b) 

the average values cleared over 1 year per Union currency and per asset class; 

(c) 

the amount of margins collected; 

(d) 

the default fund contributions 

EN 

34 

  EN 

(e) 

the largest payment obligation. 

That  competent  authority  shall  promptly  transmit  that  information  to  ESMA  and  the 
Joint Monitoring Mechanism referred to in Article 23c. 

3. 
ESMA shall, in cooperation with the EBA, EIOPA and ESRB and after consulting 
the ESCB, develop draft regulatory technical standards further specifying the content of 
the information to be reported and the level of detail of the information to be provided 
in  accordance  with  paragraph  2,  taking  into  account  which  information  is  already 
available to ESMA under the existing reporting framework. 

ESMA shall submit those draft regulatory technical standards to the Commission by … 
[PO:  please  insert  the  date  =    12  months  after  the  date  of  entry  into  force  of  this 
Regulation]. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation 
(EU) No 1095/2010. 

4. 
ESMA shall develop draft implementing technical standards specifying the format 
of the information to be submitted to the competent authority referred to in paragraph 2. 

ESMA shall submit those draft implementing technical standards to the Commission by 
…  [PO:  please  insert  the  date  =  12  months  after  the  date  of  entry  into  force  of  this 
Regulation]. 

Power  is  conferred  on  the  Commission  to  adopt  the  implementing  technical  standards 
referred to  in  the  first  subparagraph in  accordance with  Article 15 of Regulation  (EU) 
No 1095/2010.’;  

(5)  Article 9 is amended as follows: 

(a) 

in paragraph 1, the third and fourth subparagraphs are deleted; 

(b) 

in paragraph 1a, fourth subparagraph,  

- point (a) is replaced by the following: 

“(a)  that  third  country  entity  would  be  qualified  as  a  financial  counterparty  if  it  were 

established in the Union; and” 

- point (b) is deleted. 

(6) 

in Article 10, paragraphs 2a to 5 are replaced by the following: 

‘2a.  The  relevant  competent  authorities  of  the  non-financial  counterparty  and  of  the 
other  entities  within  the  group  shall  establish  cooperation  procedures  to  ensure  the 
effective  calculation  of  the  positions  and  evaluate  and  assess  the  level  of  exposure  in 
OTC derivative contracts at the group level. 

3. 
In  calculating  the  positions  referred  to  in  paragraph  1,  the  non-financial 
counterparty shall include all the OTC derivative contracts that are not cleared in a CCP 
authorised  under  Article  14  or  recognised  under  Article  25  entered  into  by  the  non-
financial  counterparty  which  are  not  objectively  measurable  as  reducing  risks  directly 
relating  to  the  commercial  activity  or  treasury  financing  activity  of  the  non-financial 
counterparty. 

ESMA  shall  develop  draft  regulatory  technical  standards,  after  having  consulted 

4. 
the ESRB and other relevant authorities, specifying all of the following: 

EN 

35 

  EN 

(a) 

criteria  for  establishing  which  OTC  derivative  contracts  are  objectively 
measurable  as  reducing  risks  directly  relating  to  the  commercial  activity  or 
treasury financing activity referred to in paragraph 3;  

(b)  values  of  the  clearing  thresholds,  which  are  determined  taking  into  account  the 
systemic relevance of the open positions and future net exposures per counterparty 
and per class of OTC derivatives; 

(c) 

the  mechanisms  triggering  a  review  of  the  values  of  the  clearing  thresholds 
following significant price fluctuations in the underlying class of OTC derivatives. 

ESMA shall submit those draft regulatory technical standards to the Commission by … 
[PO:  please  insert  the  date  =12  months  from  the  date  of  entry  into  force  of  this 
Regulation]. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation 
(EU) No 1095/2010.  

taking 

into  account, 

the  first  subparagraph,  point  (b), 

ESMA shall review, in consultation with the ESRB, the clearing thresholds referred to 
in 
the 
interconnectedness  of financial  counterparties. That  review shall be  conducted at least 
every  2  years,  and  earlier  where  necessary  or  where  required  under  the  mechanism 
established  under  the  first  subparagraph,  point  (c),  and  may  propose  changes  to  the 
thresholds  as specified in  the first  subparagraph,  point (b),  by the regulatory technical 
standards  adopted  pursuant  to  this  Article.  When  reviewing  the  clearing  thresholds, 
ESMA  shall  consider  whether  the  classes  of  OTC  derivatives,  for  which  a  clearing 
threshold has been set, are still the relevant classes of OTC derivatives or if new classes 
should be introduced. 

in  particular, 

That periodic review shall be accompanied by a report by ESMA on the subject. 

5. 
Each Member State shall designate an authority responsible for ensuring that the 
obligations of non-financial counterparties under this Regulation are met. That authority 
shall  report  to  ESMA  at  least  once  a  year,  and  more  frequently  where  an  emergency 
situation is  identified under Article 24, on the  activity in  OTC  derivatives of the non-
financial counterparties it is responsible for as well as that of the group they belong to. 

At  least  every  2  years,  ESMA  shall  present  a  report  to  the  European  Parliament,  the 
Council and the Commission on the activities of Union non-financial counterparties in 
OTC derivatives, identifying areas where there is a lack of convergence and coherence 
in the application of this Regulation as well as potential risks to the financial stability of 
the Union.’; 

(7)  Article 11 is amended as follows: 

(a) 

in paragraph 2, the following subparagraph is added: 

‘A  non-financial  counterparty  becoming  subject  for  the  first  time  to  the 
obligations  laid  down  in  the  first  subparagraph  shall  set  up  the  necessary 
arrangements to comply with those obligations within four months following the 
notification  referred  to  in  Article  10(1),  second  subparagraph,  point  (a).  A  non-
financial  counterparty  shall  be  exempted  from  those  obligations  for  contracts 
entered into during the four months following that notification.’; 

(b) 

in paragraph 3, the following subparagraphs are added: 

EN 

36 

  EN 

‘A  non-financial  counterparty  becoming  subject  for  the  first  time  to  the 
obligations  laid  out  in  the  first  subparagraph  shall  set  up  the  necessary 
arrangements to comply with those obligations within four months following the 
notification  referred  to  in  Article  10(1),  second  subparagraph,  point  (a).  A  non-
financial  counterparty  shall  be  exempted  from  those  obligations  for  contracts 
entered into during the four months following that notification. 

EBA may issue guidelines or recommendations with a view to ensure a uniform 
application  of 
the  first 
the  risk-management  procedures  referred 
subparagraph,  in  accordance  with  the  procedure  laid  down  in  Article  16  of 
Regulation (EU) No 1095/2010. 

to 

in 

EBA shall develop drafts of those guidelines or recommendations in cooperation 
with the ESAs.’; 

(c) 

in paragraph 15, first subparagraph, point (aa) is deleted. 

(8) 

 Article 13 is deleted; 

(9)  Article 14 is amended as follows: 

(a) 

paragraph 3 is replaced by the following: 

‘3.  The  authorisation  referred  to  in  paragraph  1  shall  be  granted  for  activities 
linked  to  clearing  and  shall  specify  the  services  or  activities  which  the  CCP  is 
authorised  to  provide  or  perform  including  the  classes  of  financial  instruments 
covered by such authorisation. 

An entity applying for authorisation as a CCP to clear financial instruments shall 
include  in  its  application,  in  addition  to  the  classes  of  financial  instrument  it 
applies to clear, the classes of non-financial instruments suitable for clearing that 
such CCP intends to clear.   

Where a CCP authorised pursuant to this Article intends to clear classes of non-
financial  instruments  suitable  for  clearing,  it  shall  apply  for  an  extension  of  its 
authorisation pursuant to Article 15.’; 

(b) 

the following paragraphs 6 and 7 are added: 

‘6.  To  ensure  the  consistent  application  of  this  Article,  ESMA  shall,  in  close 
cooperation  with  the  ESCB,  develop  draft  regulatory  technical  standards 
specifying the list of required documents that shall accompany an application for 
authorisation  pursuant  to  paragraph  1  and  specifying  the  information  that  such 
documents shall contain with a view to demonstrating that the CCP complies with 
all relevant requirements of this Regulation. 

ESMA shall submit those draft regulatory technical standards to the Commission 
by … [PO: please insert the date =12 months after the date of entry into force of 
this Regulation] 

Power is delegated to the Commission to adopt the regulatory technical standards 
referred  to  in  the  first  subparagraph  in  accordance  with  Articles  10  to  14  of 
Regulation (EU) No 1095/2010. 

7. 
ESMA shall develop draft implementing technical standards specifying the 
electronic  format  of  the  application  to  be  submitted  to  the  central  database  for 
authorisation referred to in paragraph 1. 

EN 

37 

  EN 

ESMA  shall  submit  those  draft  implementing  technical  standards  to  the 
Commission by … [PO: please insert the date = 12 months after the date of entry 
into force of this Regulation]. 

Power  is  conferred  on  the  Commission  to  adopt  the  implementing  technical 
standards  referred  to  in  the  first  subparagraph  in  accordance  with  Article 15  of 
Regulation (EU) No 1095/2010.’; 

(10)  Article 15 is amended as follows: 

(a) 

paragraph 1 is replaced by the following:  

‘1.  A CCP wishing to extend its business to additional services or activities not 
covered  by  the  existing  authorisation  shall  submit  a  request  for  extension  to  the 
CCP’s  competent  authority.  The  offering  of  clearing  services  or  activities  for 
which  the  CCP  has  not  already  been  authorised  shall  be  considered  to  be  an 
extension of that authorisation. 

The  extension  of  authorisation  shall  be  made  in  accordance  with  either  of  the 
following: 

(a) 

(b) 

the procedure set out in Article 17; 

the procedure set out in Article 17a where the applicant CCP so requests 
pursuant to Article 17a(3).’;  

(b)  paragraph 3 is replaced by the following: 

‘3.  ESMA shall, in close cooperation with the ESCB, develop draft regulatory 
technical standards specifying the list of required documents that shall accompany 
an  application  for  an  extension  of  authorisation  pursuant  to  paragraph  1  and 
specifying  the  information  such  documents  shall  contain  with  a  view  to 
demonstrating that the CCP meets all relevant requirements of this Regulation.  

ESMA shall submit those draft regulatory technical standards to the Commission 
by … [PO: please insert the date = 12 months after the date of entry into force of 
this Regulation]. 

Power is delegated to the Commission to adopt the regulatory technical standards 
referred  to  in  the  first  subparagraph  in  accordance  with  Articles  10  to  14  of 
Regulation (EU) No 1095/2010.’; 

(c) 

the following paragraph 4 is added: 

‘4.  ESMA shall develop draft implementing technical standards specifying the 
electronic format of the application to be submitted to the central database for an 
extension of the authorisation referred to in paragraph 1. 

ESMA  shall  submit  those  draft  implementing  technical  standards  to  the 
Commission by … [PO: please insert the date = 12 months after the date of entry 
into force of this Regulation]. 

Power  is  conferred  on  the  Commission  to  adopt  the  implementing  technical 
standards  referred  to  in  the  first  subparagraph  in  accordance  with  Article 15  of 
Regulation (EU) No 1095/2010.’; 

(11)   Article 17 is amended as follows: 

(a) 

the title of the Article is replaced by the following: 

EN 

38 

  EN 

‘Procedure for granting and refusing an application for authorisation or for 
an extension of authorisation’ 

(b)  paragraphs 1, 2 and 3 are replaced by the following: 

‘1.  The applicant CCP shall submit an application for authorisation as referred 
to  in  Article  14(1)  or  an  application  for  an  extension  of  its  authorisation  as 
referred to in Article 15(1) in an electronic format via the central database referred 
to  in  paragraph  7.  The  application  shall  be  immediately  shared  with  the  CCP’s 
competent authority, ESMA and the college referred to in Article 18(1).  

The  CCP’s  competent  authority  shall,  within  2  working  days  after  such 
application  has  been  received,  acknowledge  receipt  of  the  application,  stating  to 
the CCP whether it contains the documents required pursuant to Article 14(6) and 
(7) or, where the CCP has applied for an extension of its authorisation, pursuant to 
Article 15(3) and (4). 

Where the CCP’s competent authority determines that not all documents required pursuant to 
Article 14(6) and (7) or Article 15(3) and (4) have been submitted, it shall reject the CCP’s 
application.  

2. 
The  applicant  CCP  shall  provide  all  information  necessary  to  demonstrate 
that it has established, at the time of authorisation, all the necessary arrangements 
to meet the requirements laid down in this Regulation. 

 3.  Within  40  working  days  of  the  end  of  the  period  set  out  in  the  second 
subparagraph of paragraph 1 (“the risk assessment period”), the CCP’s competent 
authority, ESMA and the college shall each conduct risk assessments of the CCP’s 
compliance  with  the  relevant  requirements  laid  down  in  this  Regulation.  By  the 
end of the risk assessment period: 

(a) 

the  CCP’s  competent  authority  shall  transmit  its  draft  decision  and  report  to 
ESMA and the college;  

(b)  ESMA shall adopt an opinion in accordance with Article 24a(7) and transmit it 

to the CCP’s competent authority and the college;; 

(c) 

the college shall adopt an opinion pursuant to Article 19 and transmit it to the 
CCP’s competent authority and ESMA.  

For  the  purposes  of  point  (b),  ESMA  may  include  in  its  opinion  any  conditions  or 
recommendations  it  considers  necessary  to  mitigate  any  shortcomings  in  the  CCP's  risk 
management, in particular in relation to identified cross-border risks or risks to the financial 
stability of the Union. 

For  the  purposes  of  point  (c),  the  college  may  include  in  its  opinion  any  conditions  or 
recommendations  it  considers  necessary  to  mitigate  any  shortcomings  in  the  CCP's  risk 
management.’; 

(d) 

the following paragraphs 3a and 3b are inserted: 

‘3a.  During  the  risk  assessment  period  referred  to  in  paragraph  3,  the  CCP’s 
competent authority, ESMA or any of the college members may submit questions 
directly to the CCP. Where the CCP does not respond to such questions within the 
time period set by the requesting authority, the CCP’s competent authority, ESMA 
or the college may take a decision in the absence of the CCP’s response or may 
decide to extend the assessment period by a maximum of 10 working days, if, in 
their view, the question is material for the assessment.   

EN 

39 

  EN 

3b.  Within  10  working  days  of  receipt  of  both  the  ESMA  opinion  and  the 
college  opinion,  the  CCP’s  competent  authority  shall  adopt  its  decision  and 
transmit it to ESMA and the college.  

Where the CCP’s competent authority does not agree with an opinion of ESMA or 
the  college,  including  any  conditions  or  recommendations  contained  therein,  its 
decision shall contain full reasons and an explanation of any significant deviation 
from that opinion or conditions or recommendations.  

ESMA shall publish the fact that a competent authority does not comply or does 
not  intend  to  comply  with  its  opinion  or  the  opinion  of  the  college  or  with  any 
conditions  or  recommendations  included  therein.  ESMA  may  also  decide,  on  a 
case by case basis, to publish the reasons provided by the competent authority for 
not complying with the ESMA opinion or the college opinion or any conditions or 
recommendations contained therein.’;  

(e) 

paragraph 4 is replaced by the following: 

‘4.  The CCP’s competent authority shall, after duly considering the opinions of 
ESMA  and  the  college  referred  to  in  paragraph  3,  including  any  conditions  or 
recommendations contained therein,  grant authorisation as referred to in  Articles 
14  and  Article  15(1),  second  subparagraph,  point  (a),  only  where  it  is  fully 
satisfied that the applicant CCP:  

(a) 

complies  with  all  the  requirements  laid  down  in  this  Regulation  including, 
where  applicable,  for  the  provision  of  clearing  services  or  activities  for  non-
financial instruments; and  

(b) 

is notified as a system pursuant to Directive 98/26/EC. 

The CCP shall not be authorised where all the members of the college, excluding 
the  authorities  of  the  Member  State  where  the  CCP  is  established,  reach  a  joint 
opinion  by  mutual  agreement,  pursuant  to  Article  19(1),  that  the  CCP  not  be 
authorised.  That  opinion  shall  state  in  writing  the  full  and  detailed  reasons  why 
the college considers that the requirements laid down in this Regulation or other 
Union law are not met. 

Where  a  joint  opinion  by  mutual  agreement  as  referred  to  in  the  second 
subparagraph  has  not  been  reached  and  a  majority  of  two-thirds  of  the  college 
have  expressed  a  negative  opinion,  any  of  the  competent  authorities  concerned, 
based on that majority of two-thirds of the college, may, within 30 calendar days 
of the adoption of that negative opinion, refer the matter to ESMA in accordance 
with Article 19 of Regulation (EU) No 1095/2010. 

The  referral  decision  shall  state  in  writing  the  full  and  detailed  reasons  why  the 
relevant members of the college consider that the requirements laid down in this 
Regulation  or  other  parts  of  Union  law  are  not  met.  In  that  case  the  CCP’s 
competent  authority  shall  defer  its  decision  on  authorisation  and  await  any 
decision on authorisation that ESMA may take in accordance with Article 19(3) of 
Regulation (EU) No 1095/2010. The competent authority shall take its decision in 
conformity with ESMA’s decision. The matter shall not be referred to ESMA after 
the end of the 30-day period referred to in the third subparagraph. 

Where  all  the  members  of  the  college,  excluding  the  authorities  of  the  Member 
State  where  the  CCP  is  established,  reach  a  joint  opinion  by  mutual  agreement, 
pursuant  to  Article  19(1),  that  the  CCP  not  be  authorised,  the  CCP’s  competent 

EN 

40 

  EN 

authority  may  refer  the  matter  to  ESMA  in  accordance  with  Article  19  of 
Regulation (EU) No 1095/2010. 

The competent authority of the Member State where the CCP is established shall 
transmit the decision to the other competent authorities concerned.’; 

(f) 

paragraph 7 is replaced by the following: 

‘7.  ESMA  shall  maintain  a  central  database  providing  access  to  the  CCP’s 
competent  authority,  ESMA,  and  the  members  of  the  college  for  that  CCP 
(‘registered  recipients’),  to  all  documents  registered  within  the  database  for  that 
CCP. The CCP shall submit the application referred to in Article 14, Article 15(1), 
second subparagraph, point (a), and Article 49 via that database. 

The registered  recipients  shall upload promptly  all documents they receive from 
the  CCP  in  relation  to  an  application  pursuant  to  paragraph  1  and  the  central 
database  shall  automatically  inform  the  registered  recipients  when  changes  have 
been  made  to  its  content.  The  central  database  shall  contain  all  documents 
provided by an applicant CCP under paragraph 1 and all other documents relevant 
for the assessment by the CCP’s competent authority, ESMA and the college.  

Members of the CCP Supervisory Committee shall also have access to the central 
database for the performance of their tasks pursuant to Article 24a(7). The Chair 
of the CCP Supervisory Committee may limit access to some of the documents for 
the members of the CCP Supervisory Committee referred to in Article 24a, points 
(c) and (d)(ii), where justified based on confidentiality concerns.’;  

(12)  the following Articles 17a and 17b are inserted: 

‘Article 17a 

Non-objection procedure for granting a request for extension of activities or 
services 

The  non-objection  procedure  shall  apply  to  non-material  changes  to  a  CCP’s 
1. 
existing  authorisation  in  any  of  the  following  cases  where  the  proposed  additional 
clearing service or activity: 

(a) 

fulfils all of the following the conditions:  

(i) 

(ii) 

the CCP intends to clear one or more financial instruments belonging to the 
same  classes  of  financial  instruments  for  which  it  has  been  authorised  to 
clear under Articles 14 or 15;  

the  financial  instruments  referred  to  in  point  (i)  are  traded  on  a  trading 
venue  for  which  the  CCP  already  provides  clearing  services  or  performs 
activities; and 

(iii) 

the  proposed  additional  clearing  service  or  activity  does  not  involve  a 
payment in a new currency;  

(b) 

(c) 

adds a new Union currency  in a class of financial instruments already covered by 
the CCP’s authorisation; or 

adds  one  or  more  additional  tenors  to  a  class  of  financial  instruments  already 
covered  by  the  CCP’s  authorisation  provided  that  the  maturity  range  is  not 
significantly extended. 

EN 

41 

  EN 

 
2. 
The  CCP’s  competent  authority  may,  after  considering  the  input  of  the  joint 
supervisory team set up for that CCP pursuant to Article 23b, also decide to apply the 
non-objection  procedure  of  this  Article  where  a  CCP  so  requests  and  where  the 
proposed  additional  clearing  service  or  activity  does  not  fulfil  any  of  the  following 
conditions: 

(a) 

(b) 

(c) 

(d) 

(e) 

it results in the CCP needing to adapt significantly its operational structure, at 
any point in the contract cycle: 

it  includes  offering  contracts  that  cannot  be  liquidated  in  the  same  manner, 
such as via direct offer or auction, or together with contracts already cleared by 
the CCP; 

it  results  in  the  CCP  needing  to  take  into  account  material  new  contract 
specifications,  such  as  significant  extensions  of  the  ranges  of  maturities  or  a 
new option exercise styles within a category of contracts; 

it  results  in  the  introduction  of  material  new  risks,  linked  to  the  different 
characteristics of the assets referenced;  

it includes offering a new settlement  or delivery mechanism or service which 
involves  establishing  links  with  a  different  securities  settlement  system,  CSD 
or payment system which the CCP did not previously use. 

3.  A  CCP  that  submits  a  request  for  extension  requesting  that  the  non-objection 
procedure be applied, shall demonstrate why the proposed extension of its business  to 
additional clearing services or activities qualifies under paragraphs 1 or 2 to be assessed 
under the non-objection procedure. The CCP shall submit its application in an electronic 
format  via  the  central  database  referred  to  in  Article  17(7)  and  shall  provide  all 
information necessary to demonstrate that it has established, at the time of authorisation, 
all  the  necessary  arrangements  to  meet  the  relevant  requirements  laid  down  in  this 
Regulation. 

A  CCP  that  applies  for  an  extension  of  its  authorisation  requesting  that  the  non-
objection  procedure  be  applied  and  the  proposed  additional  clearing  services  or 
activities  fall  within  the  scope  of  paragraph  1,  may  start  clearing  such  additional 
financial  instruments  or  non-financial  instruments  suitable  for  clearing  before  the 
decision of the CCP’s competent authority pursuant to paragraph 4. 

4.  Within 10 working days of receipt of an application pursuant to paragraph 2, the 
CCP’s  competent  authority  shall,  after  considering  the  input  of  the  joint  supervisory 
team set up for that CCP pursuant to Article 23b, decide whether the application shall be 
subject to the non-objection procedure set out in this Article or, if the CCP’s competent 
authority has identified material risks as a result of the proposed extension of the CCP’s 
business to additional clearing services or activities, that the procedure set out in Article 
17  shall  apply.  The  CCP’s  competent  authority  shall  notify  the  applicant  CCP  of  its 
decision. Where the CCP’s competent authority has decided that the procedure set out in 
Article  17  shall  apply,  the  CCP  shall,  within  5  working  days  after  receipt  of  such 
notification, cease providing such clearing service or activity.  

5.  Where  a  CCP’s  competent  authority,  after  considering  the  input  of  the  joint 
supervisory  team  set  up  for  that  CCP  pursuant  to  Article  23b,  has  not  expressed  its 
objection to the CCP’s proposed additional services or activities within 10 working days 
of receipt of the application where paragraph 1 applies or of receipt of the notification 
referred  to  in  paragraph  4,  where  that  paragraph  applies,  confirming  that  the  non-

EN 

42 

  EN 

objection procedure set out in this Article applies, the authorisation shall be deemed as 
granted.  

6. 
The Commission is empowered to adopt delegated acts in accordance with Article 
82 to supplement this Regulation by specifying any changes to the list of non-material 
changes  listed  under  paragraph  1,  where  such  a  change  would  not  bring  an  increased 
risk to the CCP. 

Article 17b 

Procedure for seeking the opinion from ESMA and the college 

1.  A  CCP’s  competent  authority  shall  submit  in  electronic  format  via  the  central 
database referred to in Article 17(7) a request for an opinion: 

(a) 

by ESMA pursuant to Article 23a(2), where the competent authority intends to 
adopt a decision in relation to Articles 7, 8, 20, 21, 29, 30, 31, 32, 33, 35, 36, 
41 and 54;  

(b)  by the college pursuant to Article 18, where the competent authority intends to 
adopt a decision in relation to Article 20, 21, 30, 31, 32, 35, 41, 49, 51 and 54.  

That request for an opinion shall be shared immediately with the registered recipients.  

2.  Unless  otherwise  specified  under  the  relevant  Article,  ESMA  and  the  college 
shall, within 30 working days of receipt of the request referred to in paragraph 1 (‘the 
assessment period’), assess the CCP’s compliance with the respective requirements. By 
the end of the assessment period: 

(a) 

the  CCP’s  competent  authority  shall  transmit  its  draft  decision  and  report  to 
ESMA and the college;  

(b)  ESMA  shall  adopt  an  opinion  in  accordance  with  Article  24a(7),  first 
subparagraph, point (bc), and transmit it to the CCP’s competent authority and the 
college. ESMA may include in its opinion any conditions or recommendations it 
considers necessary to mitigate any shortcomings in the CCP's risk management, 
in  particular  in  relation  to  identified  cross-border  risks  or  risks  to  the  financial 
stability of the Union;  

(c) the college shall adopt  an opinion pursuant  to Article 19  and transmit  it to  ESMA 
and the CCP’s competent authority. The college opinion may include conditions 
or  recommendations  it  considers  necessary  to  mitigate  any  shortcomings  in  the 
CCP's risk management. 

3.  Within 10 working days of receipt of the ESMA opinion and, where required, the 
college  opinion,  the  CCP’s  competent  authority  shall,  after  duly  considering  the 
opinions  of  ESMA  and  the  college,  including  any  conditions  or  recommendations 
contained therein, adopt its decision and transmit it to ESMA and the college. 

Where the CCP’s competent authority does not agree with an opinion of ESMA or the 
college,  including  any  conditions  or  recommendations  contained  therein,  its  decision 
shall  contain  full  reasons  and  an  explanation  of  any  significant  deviation  from  that 
opinion or conditions or recommendations. 

ESMA  shall  publish  the  fact  that  a  competent  authority  does  not  comply  or  does  not 
intend to comply with its opinion or the opinion of the college or with any conditions or 
recommendations included therein. ESMA may also decide, on a case by case basis, to 
publish  the  reasons  provided  by  the  competent  authority  for  not  complying  with  the 

EN 

43 

  EN 

ESMA opinion or the college opinion or any conditions or recommendations contained 
therein.’; 

(13)  Article 18 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

‘1.  Within  30  calendar  days  of  the  submission  of  a  complete  application  in 
accordance  with  Article  17,  the  CCP's  competent  authority  shall  establish  a 
college to facilitate the exercise of the tasks referred to in Articles 15, 17 , 20, 21, 
30, 31, 32, 35, 41, 49, 51 and 54.’; 

(b) 

in paragraph 2, point (a) is replaced by the following: 

‘(a) 

the  Chair  or  any  of  the  independent  members  of  the  CCP  Supervisory 
Committee  referred  to  in  Article  24a(2),  points  (a)  and  (b),  who  shall 
manage and chair the college;’; 

(14)  Article 19 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

‘1.  Where the college is required to give an opinion pursuant to this Regulation, 
it shall reach a joint opinion determining whether the CCP complies with all the 
requirements laid down in this Regulation. 

Without prejudice to Article 17(4), third subparagraph, and if no joint opinion is 
reached  in  accordance  with  the  first  subparagraph,  the  college  shall  adopt  a 
majority opinion within the same period.’; 

(b) 

in paragraph 3, the fourth subparagraph is replaced by the following: 

‘The members of the college referred to in Article 18(2), points (ca) and (i), shall 
have no voting rights on the opinions of the college.’; 

(c) 

paragraph 4 is deleted; 

(15)  in Article 20, paragraphs 3 to 7 are replaced by the following: 

‘3.  The  CCP’s  competent  authority  shall  consult  ESMA  and  the  members  of  the 
college, in accordance with paragraph 6, on the necessity to withdraw the authorisation 
of the CCP, except where a decision is required urgently. 

4. 
ESMA  or  any  member  of  the  college  may,  at  any  time,  request  that  the  CCP’s 
competent  authority  examine  whether  the  CCP  remains  in  compliance  with  the 
conditions under which authorisation was granted. 

The CCP’s competent authority may limit the withdrawal to a particular service, 

5. 
activity, or class of financial instruments or  non-financial instruments. 

6. 
Before  the  CCP’s  competent  authority  takes  a  decision  to  withdraw  a  particular 
service, activity, or class of financial instruments  or  non-financial instruments,  it shall 
request the opinions of ESMA and the college in accordance with Article 17b. 

7.  Where  a  CCP’s  competent  authority  takes  a  decision  on  the  withdrawal  of 
authorisation  in  full  or in  relation  to  a particular service,  activity, or  class of financial 
instruments or non-financial instruments, that decision shall take effect throughout the 
Union.’; 

(16)  Article 21 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

EN 

44 

  EN 

‘1.  The  competent  authorities  referred  to  in  Article  22  shall  do  all  of  the 
following:  

(a) 

(b) 

(c) 

review 
strategies,  processes 
implemented by CCPs to comply with this Regulation;  

arrangements, 

the 

and  mechanisms 

review the services or activities the CCP has started providing following the 
non-objection procedures pursuant to Article 17a or pursuant to Article 49;  

evaluate the risks, including financial and operational risks, to which CCPs 
are, or might be, exposed.’; 

(b)  paragraphs 3 and 4 are replaced by the following: 

 ‘3.  The  competent  authorities  shall,  after  having  considered  the  input  of  the 
joint  supervisory team  set  up for that CCP pursuant  to  Article 23b, establish the 
frequency and depth of the review and evaluation referred to in paragraph 1 of this 
Article,  having  particular  regard  to  the  size,  systemic  importance,  nature,  scale, 
complexity  of  the  activities  and  interconnectedness  with  other  financial  market 
infrastructures of the CCPs concerned and to the supervisory priorities established 
by  ESMA in  accordance with  Article 24a(7),  first  subparagraph,  point  (ba). The 
competent authorities shall update the review and evaluation at least on an annual 
basis. 

CCPs shall be subject to on-site inspections. Competent authorities shall invite the 
members of the joint supervisory team set up for that CCP pursuant to Article 23b, 
to participate in on-site inspections. 

The  competent  authority  shall  forward  to  the  members  of  the  joint  supervisory 
team set up for that CCP pursuant to Article 23b any information received from 
the CCPs during or in relation to on-site inspections. 

4 
 The  competent  authorities  shall  regularly,  and  at  least  annually,  submit  a 
report to the college on the results of the review and evaluation as referred to in 
paragraph  1,  including  whether  the  competent  authority  has  taken  any  remedial 
action  or  imposed  penalties.  The  competent  authorities  shall  communicate  the 
report covering a calendar year to ESMA by 30 March of the following calendar 
year. That report shall be subject to an opinion of the college pursuant to Article 
19 and an opinion by ESMA pursuant to Article 24a(7), first subparagraph, point 
(bc), issued in accordance with the procedure set out in Article 17b.’; 

(17)  Article 23a is amended as follows: 

(a) 

paragraphs 1 and 2 are replaced by the following: 

‘1.  ESMA  shall  fulfil  a  coordination  role  between  competent  authorities  and 
across colleges to: 

(a) 

build a common supervisory culture and consistent supervisory practices;  

(b) 

ensure uniform procedures and consistent approaches; 

(c) 

strengthen consistency in supervisory outcomes, in particular with regard to 
supervisory areas which have a cross-border dimension or a possible cross-
border impact; 

(d) 

strength coordination in emergency situations in accordance with Article 24; 

(e) 
assess  risks  when  providing  opinions  to  competent  authorities  pursuant  to 
paragraph  2  on  CCPs’  compliance  with  the  requirements  of  this  Regulation,  in 

EN 

45 

  EN 

particular  in  relation  to  identified  cross-border  risks  or  risks  to  the  financial 
stability  of  the  Union,  and  providing  recommendations  as  to  how  a  CCP  shall 
mitigate those risks. 

2. 
Competent  authorities  shall  submit  their  draft  decisions  to  ESMA  for  its 
opinion  before  adopting  any  act  or  measure  pursuant  to  Articles  7,  8  and  14, 
Article 15(1), second subparagraph, point (a) and Articles 20 and 21, Articles 29 
to 33, and Articles 35, 36, 41, and 54. 

Competent  authorities  may  also  submit  draft  decisions  to  ESMA  for  its  opinion 
before  adopting  any  other  act  or  measure  in  accordance  with  their  duties  under 
Article 22(1).’; 

(b)  paragraphs 3 and 4 are deleted; 

(18)  the following Articles 23b and 23c are inserted: 

‘Article 23b 

Joint Supervisory Teams 

1.  A  joint  supervisory  team  shall  be  established  for  the  supervision  of  each  CCP 
authorised  under  Article  14.  Each  joint  supervisory  team  shall  be  composed  of  staff 
members from the CCP’s competent authority, ESMA and the members of the college 
referred to in Article 18, points (c), (g) and (h). Other members of the college may also 
request to participate in the joint supervisory team. Joint supervisory teams shall work 
under the coordination of a designated competent authority staff member. 

The tasks of a joint supervisory team shall include, but are not limited to, all of the 

2. 
following: 

(a) 

provide  input  to  the  competent  authorities,  ESMA  and  the  colleges  pursuant  to 
Article 17a (2), (4) and (5)and Article 21(3);  

(b)  participate to on-site inspections pursuant to Article 21(3); 

(c) 

liaise with competent authorities and members of the college, where relevant; 

(d)  where  a  CCP’s  competent  authority  so  requests,  provide  assistance  to  that 
competent authority in assessing the CCP’s compliance with the requirements of 
this Regulation.  

The  CCP’s  competent  authority  shall  be  in  charge  of  the  establishment  of  joint 

3. 
supervisory teams. 

ESMA  and  authorities  participating  to  the  joint  supervisory  teams  shall  consult 

4. 
each other and agree on the use of resources with regard to the joint supervisory teams. 

Article 23c 

Joint Monitoring Mechanism 

ESMA shall establish a Joint Monitoring Mechanism for the exercise of the tasks 

1. 
referred to in paragraph 2.  

The Joint Monitoring Mechanism shall be composed of: 

(a) 

representatives of ESMA; 

(b) 

representatives of EBA and EIOPA; 

EN 

46 

  EN 

(c) 

representatives  of  the  Commission,  the  ESRB,  the  ECB  and  the  ECB  in  the 
framework of the tasks concerning the prudential supervision of credit institutions 
within the single supervisory mechanism conferred upon it in accordance Council 
Regulation (EU) No 1024/2013. 

ESMA  shall  manage  and  chair  the  meetings  of  the  Joint  Monitoring  Mechanism.  The 
Chair  of  the  Joint  Monitoring  Mechanism,  upon  request  of  the  other  members  of  the 
Joint  Monitoring  Mechanism  or  on  his  own  initiative,  may  invite  other  authorities  to 
participate in the meetings when relevant to the topics to be discussed. 

2. 

The Joint Monitoring Mechanism shall: 

(a)  monitor  the  implementation  of  the  requirements  set  out  in  Articles  7a    and  7b, 

including all of the following: 

(i) 

the  overall  exposures  and  reduction  of  exposures 
to  substantially 
systemically  important  clearing  services  identified  pursuant  to  Article 
25(2c); 

(ii)  developments  related  to  clearing  in  CCPs  authorised  under  Article  14  and 
access to clearing by clients to such CCPs, including fees charged by such 
CCPs for establishing accounts pursuant to Article 7a and any fees charged 
by  clearing  members  to  their  clients  for  establishing  accounts  and 
undertaking clearing pursuant to Article 7a;  

(iii)  other significant developments in clearing practices having an impact on the 

level of clearing at CCPs authorised under Article 14;  

(b)  monitor client  clearing  relationships,  including portability and clearing members 
and  clients’  interdependencies  and  interactions  with  other  financial  market 
infrastructures;  

(c) 

(d) 

contribute  to  the  development  of  Union-wide  assessments  of  the  resilience  of 
CCPs  focussing  on  liquidity  risks  concerning  CCPs,  clearing  members  and 
clients; 

identify concentration risks, in particular in client clearing, due to the integration 
of Union financial markets,  including  where several  CCPs, clearing members or 
clients use the same service providers; 

(e)  monitor the effectiveness of the measures aimed at improving the attractiveness of 
Union CCPs, encouraging clearing at Union CCPs and enhancing the monitoring 
of cross-border risks. 

The  bodies  participating  in  the  Joint  Monitoring  Mechanism  and  national  competent 
authorities  shall  cooperate  and  share  the  information  necessary  to  carry  out  the 
monitoring activities referred to in the first subparagraph. 

Where the required information is not made available, including information referred to 
in Article 7a(4), ESMA may, by simple request, require authorised CCPs, their clearing 
members and their clients to provide the necessary information enabling ESMA and the 
other  bodies  participating  to  Joint  Monitoring  Mechanism  to  perform  the  assessment 
referred to in the first subparagraph. 

3. 
ESMA  shall,  in  cooperation  with  the  other  bodies  participating  to  the  Joint 
Monitoring  Mechanism,  submit  an  annual  report  to  the  European  Parliament,  the 
Council and the Commission on the results of its activities pursuant to paragraph 2. 

EN 

47 

  EN 

4. 
ESMA shall act in accordance with Article 17 of Regulation (EU) No 1095/2010 
where,  on  the  basis  of  the  information  received  as  part  of  the  Joint  Monitoring 
Mechanism and following the discussions held therein:   

(a) 

(b) 

it  considers  that  competent  authorities  fail  to  ensure  clearing  members’  and 
clients’ compliance with the requirement set out in Article 7a;  

it identifies a risk to the financial stability of the Union due to an alleged breach or 
non-application of Union law. 

Before acting in accordance with the first subparagraph, ESMA may issue guidelines or 
recommendations pursuant to Article 16 of Regulation (EU) No 1095/2010. 

5.  Where  ESMA,  on  the  basis  of  the  information  received  as  part  of  the  Joint 
Monitoring  Mechanism  and  following  the  discussions  held  therein,  considers  that 
compliance  with  the  requirement  set  out  in  Article  7a  does  not  effectively  ensure  the 
reduction of Union clearing members’ and clients’ excessive exposure to Tier 2 CCPs, it 
shall  review  the  regulatory  technical  standards  referred  to  in  Article  7a(5),  setting, 
where necessary, an appropriate adaptation period which shall not exceed 12 months.’; 

(19)  Article 24 is replaced by the following: 

‘Article 24 

Emergency situations 

1. 
The  CCP's  competent  authority  or  any  other  relevant  authority  shall  inform 
ESMA,  the  college,  the  relevant  members  of  the  ESCB,  the  Commission  and  other 
relevant authorities without undue delay of any emergency situation relating to a CCP, 
including all of the following:  

(a) 

situations  or  events  which  impact,  or  are  likely  to  impact,  the  prudential  or 
financial  soundness  or  the  resilience  of  CCPs  authorised  in  accordance  with 
Article 14, their clearing members or clients;  

(b) where a CCP intends to activate its recovery plan pursuant to Article 9 of Regulation 
(EU) No 2021/23, a competent authority has taken an early intervention measure 
pursuant to Article 18 of that Regulation or a competent authority has required a 
total or partial removal of the senior management or board of the CCP pursuant to 
Article 19 of that Regulation; 

(c)  where  there  are  developments  in  financial  markets,  which  may  have  an  adverse 
effect  on  market  liquidity,  the  transmission  of  monetary  policy,  the  smooth 
operation of payment systems or the stability of the financial system in any of the 
Member States where the CCP or one of its clearing members are established. 

2. 
ESMA shall coordinate competent authorities, the resolution authority designated 
pursuant  to  Article  3(1)  of  Regulation  (EU)  2021/23  and  colleges  to  build  a  common 
response to emergency situations relating to a CCP.  

3. 
In case of emergency situations, except  where a  resolution  authority has  taken a 
resolution  action  in  relation  to  a  CCP  pursuant  to  Article  21  of  Regulation  (EU)  No 
2021/23, and to coordinate the responses of competent authorities, a meeting of the CCP 
Supervisory Committee: 

(a)  may be convened by the Chair of the CCP Supervisory Committee; 

(b) 

shall  be  convened  by  the  Chair  of  the  CCP  Supervisory  Committee,  upon  the 
request of two members of the CCP Supervisory Committee.  

EN 

48 

  EN 

4.  Any of the following authorities may also be invited to the meeting referred to in 
the paragraph 3, where relevant, considering the issues to be discussed at the meeting: 

(a) 

(b) 

(c) 

(d) 

(e) 

the relevant central banks of issue;  

the  relevant  competent  authorities  for  the  supervision  of  clearing  members, 
including, where relevant, the ECB in the framework of the tasks concerning the 
prudential  supervision  of  credit  institutions  within  the  single  supervisory 
mechanism  conferred  upon  it  in  accordance  with  Council  Regulation  (EU)  No 
1024/2013; 

the relevant competent authorities for the supervision of trading venues;  

the  relevant  competent  authorities  for  the  supervision  of  clients  where  they  are 
known; 

the  relevant  resolution  authorities  designated  pursuant  to  Article  3(1)  of 
Regulation (EU) 2021/23. 

Where  a  meeting  of  the  CCP  Supervisory  Committee  is  held  pursuant  to  the  first 
subparagraph,  the  Chair  shall  inform  EBA,  EIOPA,  the  ESRB  and  the  Commission 
thereof who shall also be invited to participate to that meeting upon their request.  

ESMA may, by simple request, require authorised CCPs, their clearing members 
5. 
and clients, connected financial market infrastructures and related third parties to whom 
those CCPs have outsourced operational functions or activities to provide all necessary 
information to enable ESMA to carry out its coordination function under this Article. 

6. 
ESMA  may,  upon  the  proposal  of  the  CCP  Supervisory  Committee,  issue 
emergency recommendations pursuant to Article 16 of Regulation (EU) No 1095/2010 
addressed to one or more competent authorities recommending them to adopt temporary 
or permanent  supervisory  decisions in  line with  the requirements  set  out  in  Article 16 
and  in  Titles  IV  and  V  to  avoid  or  mitigate  significant  adverse  effects  on  the  Union 
financial  stability.  ESMA  may  issue  emergency  recommendations  only  where  more 
than  one  authorised  CCP  is  impacted  or  where  Union-wide  events  are  destabilising 
cross-border cleared markets.’; 

(20)  Article 24a is amended as follows: 

(a) 

in paragraph 2, point (d) (ii) is replaced by the following: 

‘(ii)  where  the  CCP  Supervisory  Committee  convenes  in  relation  to  CCPs 
authorised  in  accordance  with  Article  14,  in  the  context  of  discussions 
pertaining  to  paragraph  7  of  this  Article,  the  central  banks  of  issue  of  the 
Union  currencies  of  the  financial  instruments  cleared  by  authorised  CCPs 
that  have  requested  membership  of  the  CCP  Supervisory  Committee,  who 
shall be non-voting.’; 

(b)  paragraph 3 is replaced by the following; 

‘3.  The Chair may invite as observers to the meetings of the CCP Supervisory 
Committee, where appropriate and necessary, members of the colleges referred to 
in  Article  18,  representatives  from  the  relevant  authorities  of  clients  where  they 
are known and from the relevant Union institutions and bodies.’; 

(c) 

paragraph 7 is amended as follows: 

(i) 

the introductory wording is replaced by the following: 

EN 

49 

  EN 

‘In relation to CCPs authorised or applying for authorisation  in accordance 
with  Article  14,  the  CCP  Supervisory  Committee  shall,  for  the  purpose  of 
Article 23a(2), prepare decisions and carry out the tasks entrusted to ESMA 
in the following points:’; 

(ii) 

the following points (ba), (bb) and (bc) are inserted: 

‘(ba)  at least annually, discuss and identify supervisory priorities for CCPs 
authorised under Article 14 in order to  feed in  the preparation of the 
Union  strategic  supervisory  priorities  by  ESMA  in  accordance  with 
Article 29a of Regulation (EU) No 1095/2010; 

(bb)  consider,  in  cooperation  with  the  EBA,  EIOPA,  and  the  ECB  in 
carrying  out  its  tasks  within  a  single  supervisory  mechanism  under 
Regulation  (EU)  No  1024/2013,  any  cross-border  risks  arising  from 
CCPs’  activities, 
interconnectedness, 
interlinkages  and  concentration  risks  due  to  such  cross-border 
connections; 

including  due 

to  CCPs’ 

(bc)  prepare  draft  opinions  for  adoption  by  the  Board  of  Supervisors  in 
accordance with Articles 17 and 17b and draft validation decisions in 
accordance with Article 49;’; 

(iii) 

the following subparagraph is added: 

‘ESMA shall on a yearly basis report to the Commission on the cross-border 
risks  arising  from  CCPs’  activities  referred  to  in  point  (bb)  in  the  first 
subparagraph.’;  

(21)  Article 25 is amended as follows: 

(a) 

in paragraph 4, the third subparagraph is replaced by the following; 

‘The recognition decision shall be based on the conditions set out in paragraph 2 
for Tier 1 CCPs and in paragraph 2, points (a) to (d), and paragraph 2b for Tier 2 
CCPs.  Within  180  working  days  of  the  determination  that  an  application  is 
complete  in  accordance  with  the  second  subparagraph,  ESMA  shall  inform  the 
applicant  CCP  in  writing,  with  a  fully  reasoned  explanation,  whether  the 
recognition has been granted or refused.’; 

(b) 

in paragraph 5, the second subparagraph is replaced by the following: 

‘Where  the  review  is  undertaken  in  accordance  with  point  (a)  of  the  first 
subparagraph, it shall be conducted in accordance with paragraphs 2 to 4. Where 
the review is undertaken in accordance with point (b) of the first subparagraph, it 
shall also  be conducted in  accordance with  paragraphs 2 to  4, however  the CCP 
referred  to  in  paragraph  1  shall  not  be  required  to  submit  a  new  application  but 
shall  provide  ESMA  with  all  information  necessary  for  the  review  of  its 
recognition.’; 

(c) 

in paragraph 6, the following subparagraph is added: 

‘Where  in  the  interests  of  the  Union  and  considering  the  potential  risks  for  the 
Union  financial  stability  due  to  the  expected  participation  of  clearing  members 
and  trading  venues  established  in  the  Union  to  CCPs  established  in  a  third 
country, the Commission may adopt the implementing act referred to in the first 
subparagraph irrespective of whether point (c) of that subparagraph is fulfilled.’; 

EN 

50 

  EN 

(d)  paragraph 7 is replaced by the following: 

‘7.  ESMA shall establish effective cooperation arrangements with  the relevant 
competent authorities of third countries whose legal and supervisory frameworks 
have  been  recognised  as  equivalent  to  this  Regulation  in  accordance  with 
paragraph 6..’; 

(e) 

the following paragraphs 7a, 7b and 7c are added: 

‘7a.  Where ESMA has not yet determined the tiering of a CCP or where ESMA 
has determined that all or some CCPs in a relevant third country are Tier 1 CCPs, 
the cooperation arrangements referred to in paragraph 7 shall take into account the 
risk the provision of clearing services by those CCPs entails and shall specify: 

(a) 

the mechanism for the exchange of information on an annual basis between 
ESMA, the central banks of issue referred to in paragraph 3, point (f), and 
the competent authorities of the third countries concerned, so that ESMA is 
able to: 

(i) 

(ii) 

ensure  that  the  CCP  complies  with  the  conditions  for  recognition 
under paragraph 2;  

identify  any  potential  material  impact  on  market  liquidity  or  the 
financial stability of the Union or one or more of its Member States; 
and  

(iii)  monitor clearing activities in one, or more, of the CCPs established in 
such third country by clearing members established in the Union, or is 
part of a group subject to consolidated supervision in the Union.  

exceptionally, the mechanism for the exchange of information on a quarterly 
basis  requiring  detailed  information  covering  the  aspects  referred  to  in 
paragraph  2a  and  in  particular  information  on  significant  changes  to  risk 
models  and  parameters,  extension  of  CCP  activities  and  services  and 
changes  in  the  client  account  structure,  with  the  aim  to  detect  if  a  CCP  is 
potentially close to becoming or is potentially likely to become systemically 
important  for  the  financial  stability  of  the  Union  or  one  or  more  of  its 
Member States. 

the  mechanism  for  prompt  notification  to  ESMA  where  a  third-country 
competent  authority  deems  a  CCP  it  is  supervising  to  be  in  breach  of  the 
conditions of its authorisation or of other law to which it is subject; 

the  procedures  necessary  for  the  effective  monitoring  of  regulatory  and 
supervisory developments in a third country; 

the  procedures  for  third-country  authorities  to  inform  ESMA,  the  third-
country  CCP  college  referred  to  in  Article  25c,  and  the  central  banks  of 
issue  referred  to  in  paragraph  3,  point  (f),  without  undue  delay  of  any 
emergency 
including 
developments  in  financial  markets,  which  may  have  an  adverse  effect  on 
market liquidity and the stability of the financial system in the Union or one 
of its Member States and the procedures and contingency  plans to  address 
such situations; 

recognised  CCP, 

situations 

relating 

the 

to 

(b) 

(c) 

(d) 

(e) 

EN 

51 

  EN 

(f) 

(g) 

the  procedures  for 
the  effective 
enforcement  of  decisions  adopted  by  ESMA  in  accordance  with  Articles 
25f, 25k(1), point (b), 25l, 25m and 25p; 

third-country  authorities 

to  assure 

they  have  provided 

the  consent  of  third-country  authorities  to  the  onward  sharing  of  any 
the  cooperation 
information 
arrangements  with  the  authorities  referred  to  in  paragraph  3  and  the 
members  of  the  third-country  CCP  college,  subject  to  the  professional 
secrecy requirements set out in Article 83. 

to  ESMA  under 

7b.  Where  ESMA  has  determined  that  at  least  one  CCP  in  a  relevant  third 
country is a Tier 2 CCP, the cooperation arrangements referred to in paragraph 7 
shall specify in relation to those Tier 2 CCPs at least the following: 

(a) 

(b) 

(c) 

(d) 

(e) 

the  elements  referred  to  in  paragraph  7a,  points  (a),  (c),  (d),  (e)  and  (g), 
where  cooperation  arrangements  are  not  already  established  with  the 
relevant third-country pursuant to the second subparagraph; 

the mechanism for the exchange of information on a monthly basis between 
ESMA, the central banks of issue referred to paragraph 3, point (f), and the 
competent  authorities  of  the  third  countries  concerned,  including  access  to 
all  information  requested  by  ESMA  to  ensure  CCP’s  compliance  with  the 
requirements referred to in paragraph 2b;  

the  procedures  concerning  the  coordination  of  supervisory  activities, 
including the agreement of third-country authorities to allow investigations 
in  accordance  with  Articles  25g  and  25h 
and  on-site 
respectively; 

inspections 

the  procedures  for 
the  effective 
enforcement  of  decisions  adopted  by  ESMA  in  accordance  with  Articles 
25b, 25f to 25m, 25p and 25q; 

third-country  authorities 

to  assure 

the  procedures  for  third-country  authorities  to  promptly  inform  ESMA  of 
the following with a focus on aspects relevant for the Union or one or more 
of its Member States: 

(i) 

(ii) 

the  establishment  of  recovery  plans  and  resolution  plans  and  any 
subsequent material changes to such plans; 

if a Tier 2 CCP intends to activate its recovery plan or where the third-
country  authorities  have  determined  that  there  are  indications  of  an 
emerging crisis situation that could affect the operations of that CCP, 
in particular, its ability to provide clearing services or where the third-
country  authorities  envisage  to  take  a  resolution  action  in  the  near 
future. 

7c.  Where  ESMA  considers  that  a  third-country  competent  authority  fails  to 
apply any of the provisions laid down in a cooperation arrangement established in 
accordance with paragraphs 7, 7a and 7b, it shall inform the Commission thereof 
confidentially and without  delay.  In such a case, the Commission may decide to 
review the implementing act adopted in accordance with paragraph 6.’; 

(22)  in Article 25b(1), the second subparagraph is replaced by the following: 

‘ESMA shall require from each Tier 2 CCP all of the following: 

EN 

52 

  EN 

(i) 

(ii) 

a  confirmation,  at  least  on  a  yearly  basis,  that  the  requirements  referred  to  in 
Article 25(2b) points (a), (c) and (d), continue to be fulfilled; 

information  and  data  on  a  regular  basis  to  ensure  ESMA  is  able  to  supervise 
those  CCPs’  compliance  with  the  requirements  referred  to  in  Article  25(2b), 
point (a).’; 

(23)  in Article 25p(1), point (c) is replaced by the following; 

‘(c) 

the  CCP  concerned  has  seriously  and  systematically  infringed  any  of  the 
applicable requirements laid down in this Regulation or no longer complies with 
any of the conditions for recognition laid down in Article 25 and has not taken the 
remedial action requested by ESMA within an appropriately set timeframe of up 
to a maximum of one year.’; 

(24)  the following Article 25r is inserted: 

‘Article 25r 

Public notice 

Without prejudice to Articles 25p and 25q, ESMA may issue a public notice where all 
of the following conditions have been fulfilled:  

(a) 

(b) 

a third-country CCP has not paid the fees due under Article 25d or it has not 
paid fines due under Article 25j or periodic penalty payments due under Article 
25k; 

the CCP has not taken any remedial action requested by ESMA in any of the 
situations  laid  down  in  Article  25p(1),  point  (c)  within  an  appropriately  set 
timeframe of up to six months.’; 

(25)  in Article 26(1), the first subparagraph is replaced by the following: 

‘1.  A  CCP  shall  have  robust  governance  arrangements,  which  include  a  clear 
organisational  structure  with  well-defined, 
lines  of 
responsibility,  effective  processes  to  identify,  manage,  monitor  and  report  the  risks  to 
which  it  is  or  might  be  exposed,  and  adequate  internal  control  mechanisms,  including 
sound  administrative  and  accounting  procedures.  A  CCP  shall  not  be  or  become  a 
clearing  member,  a  client,  or  establish  indirect  clearing  arrangements  with  a  clearing 
member with the aim to undertake clearing activities at a CCP.’; 

transparent  and  consistent 

(26)  Article 31 is amended as follows: 

(a) 

in paragraph 2,the third and fourth subparagraph are replaced by the following:  

‘The  competent  authority  shall,  promptly  and  in  any  event  within  two  working 
days  of  receipt  of  the  notification  referred  to  in  this  paragraph  and  of  the 
information referred to in paragraph 3, acknowledge receipt in writing thereof to 
the  proposed  acquirer  or  vendor  and  share  the  information  with  ESMA  and  the 
college. 

Within  60  working  days  as  from  the  date  of  the  written  acknowledgement  of 
receipt  of  the  notification  and  all  documents  required  to  be  attached  to  the 
notification on the basis of the list referred to in Article 32(4) and unless extended 
in accordance with this Article, (‘the assessment period’), the competent authority 
shall  carry  out  the  assessment  provided  for  in  Article  32(1)  (‘the  assessment’). 
The college shall issue an opinion pursuant to Article 19 and ESMA shall issue an 

EN 

53 

  EN 

opinion  pursuant  to  Article  24a(7),  first  subparagraph,  point  (bc)  and  in 
accordance with the procedure under Article 17b during the assessment period.’; 

(b) 

in paragraph 3 the first subparagraph is replaced by the following:  

‘The  competent  authority,  ESMA  and  the  college  may,  during  the  assessment 
period,  where  necessary,  but  no  later  than  on  the  50th  working  day  of  the 
assessment  period,  request  any  further  information  that  is  necessary  to  complete 
the  assessment.  Such  request  shall  be  made  in  writing  and  shall  specify  the 
additional information needed.’; 

(27)   in Article 32(1), the fourth subparagraph is replaced by the following: 

‘The assessment of the competent authority concerning the notification provided for in 
Article  31(2)  and  the  information  referred  to  in  Article  31(3),  shall  be  subject  to  an 
opinion  of  the  college  pursuant  to  Article  19  and  an  opinion  by  ESMA  pursuant  to 
Article 24a(7),  first  subparagraph, point  (bc), issued in  accordance  with  the procedure 
set out in Article 17b.’; 

(28)  Article 35 is amended as follows: 

(a) 

in paragraph 1, the second subparagraph is replaced by the following:  

‘A  CCP  shall  not  outsource  major  activities  linked  to  risk  management  unless 
such  outsourcing  is  approved  by  the  competent  authority.  The  decision  of  the 
competent  authority  shall  be  subject  to  an  opinion  of  the  college  pursuant  to 
Article  19  and  an  opinion  by  ESMA  pursuant  to  Article  24a(7)(bc)  issued  in 
accordance with the procedure set out in Article 17b.’; 

(b)  paragraph 3 is replaced by the following: 

‘3.  A  CCP  shall  make  all  information  necessary  to  enable  the  competent 
authority, ESMA and the college to assess the compliance of the performance of 
the outsourced activities with this Regulation available on request.’; 

(29)  Article 37 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

‘1.  A  CCP  shall  establish,  where  relevant  per  type  of  product  cleared,  the 
categories  of  admissible  clearing  members  and  the  admission  criteria,  upon  the 
advice of the risk committee pursuant to Article 28(3). Such criteria shall be non-
discriminatory, transparent  and objective so as to ensure  fair and open access  to 
the  CCP  and  shall  ensure  that  clearing  members  have  sufficient  financial 
resources  and  operational  capacity  to  meet  the  obligations  arising  from 
participation in a CCP. Criteria that restrict access shall be permitted only to the 
extent  that  their  objective  is  to  control  the  risk  for  the  CCP.    The  criteria  shall 
ensure  that  CCPs  or  clearing  houses  cannot  be  clearing  members,  directly  or 
indirectly, of the CCP.’; 

(b) 

the following paragraph 1a is inserted: 

‘1a.  A CCP shall accept non-financial counterparties as clearing members only if 
they  are  able  to  demonstrate  that  they  are  able  to  fulfil  the  margin  requirements 
and default fund contributions, including in stressed market conditions.  

The  competent  authority  of  a  CCP  accepting  non-financial  counterparties  shall 
regularly review such arrangements and report to ESMA and the college on their 
appropriateness.  

EN 

54 

  EN 

A non-financial counterparty acting as a clearing member shall not be permitted to 
offer  client  clearing  services  and  shall  only  keep  accounts  at  the  CCP  for  assets 
and positions held for its own account. 

ESMA may issue an opinion or a recommendation on the appropriateness of such 
arrangements following an ad-hoc peer review.’; 

(c) 

the following paragraph 7 is added: 

‘7. ESMA  shall,  after  having  consulted  the  EBA,  develop  draft  regulatory 
technical standards further specifying the elements to be considered when  laying 
down the admission criteria referred to in paragraph 1. 

ESMA shall submit those draft regulatory technical standards to the Commission 
by … [PO please enter 12 months after entry into force of this Regulation]. 

Power is delegated to the Commission to adopt the regulatory technical standards 
referred  to  in  the  first  subparagraph  in  accordance  with  Articles  10  to  14  of 
Regulation (EU) No 1095/2010”. 

(30)   Article 38 is amended as follows:  

(a) 

in paragraph 7, the following subparagraph is added:  

‘Clearing  members  providing  clearing  services  and  clients  providing  clearing 
services shall inform their clients in a clear and transparent manner of the way the 
margin models of the CCP work, including in stress situations, and provide them 
with  a  simulation  of  the  margin  requirements  they  may  be  subject  to  under 
different scenarios. This shall include both the margins required by the CCP and 
any additional margins required by the clearing members and the clients providing 
clearing services themselves.’; 

(b)  paragraph 8 is replaced by the following: 

‘8.  The  clearing  members  of  the  CCP  and  clients  providing  clearing  services, 
shall  clearly  inform  their  existing  and  potential  clients  of  the  potential  losses  or 
other costs that they may bear as a result of the application of default management 
procedures  and  loss  and  position  allocation  arrangements  under  the  CCP’s 
operating rules, including the type of compensation they may receive, taking into 
account  Article  48(7).  Clients  shall  be  provided  with  sufficiently  detailed 
information  to  ensure  that  they  understand  the  worst-case  losses  or  other  costs 
they could face should the CCP undertake recovery measures.’; 

(31)  Article 41 is amended as follows:  

(a) 

paragraphs 1, 2 and are replaced by the following: 

‘1.  A  CCP  shall  impose,  call  and  collect  margins  to  limit  its  credit  exposures 
from  its  clearing  members  and,  where  relevant,  from  CCPs  with  which  it  has 
interoperability arrangements. Such margins shall be sufficient to cover potential 
exposures  that  the  CCP estimates  will  occur  until  the  liquidation  of  the  relevant 
positions. They shall also be sufficient to cover losses that result from at least 99 
%  of  the  exposures  movements  over  an  appropriate  time  horizon  and  they  shall 
ensure that a CCP fully collateralises its exposures with all its clearing members, 
and, where relevant, with CCPs with which it has interoperability arrangements, at 
least on a daily basis. A CCP shall continuously monitor and revise the level of its 
margins  to  reflect  current  market  conditions  taking  into  account  any  potentially 
procyclical effects of such revisions. 

EN 

55 

  EN 

2.  A CCP shall adopt models and parameters in setting its margin requirements 
that capture the risk characteristics of the products cleared and take into account 
the  interval  between  margin  collections,  market  liquidity  and  the  possibility  of 
changes over the duration of the transaction. The models shall be validated by the 
competent authority and subject to an opinion in accordance with Article 19 and 
an opinion by ESMA in accordance with Article 24a(7), first subparagraph, point 
(bc), issued in accordance with the procedure under Article 17b. 

3.  A  CCP  shall  call  and  collect  margins  on  an  intraday  basis,  at  least  when 
predefined thresholds are exceeded. In doing so a CCP shall consider the potential 
impact of its intraday margin collections and payments on the liquidity position of 
its  participants.  A  CCP  shall  strive  to  the  best  of  its  ability  not  to  hold  intraday 
variation margin calls after all payments due have been received.’; 

(32)  in Article 44(1), the second subparagraph is replaced by the following : 

‘A CCP shall measure,  on a daily basis, its potential liquidity needs.  It  shall take into 
account the liquidity risk generated by the default of at least the two entities, including 
clearing members or liquidity providers, to which it has the largest exposures.’; 

(33)   Article 46 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

‘1.  A CCP shall accept highly liquid collateral with minimal credit and market 
risk to cover its initial and ongoing exposure to its clearing members. A CCP may 
accept public guarantees or public bank or commercial bank guarantees, provided 
that they are unconditionally available upon request within the liquidation period 
referred to in Article 41. Where bank guarantees are provided to a CCP, that CCP 
shall take them into account when calculating its exposure to the bank that is also 
a  clearing  member.  The  CCP  shall  apply  adequate  haircuts  to  asset  values  and 
guarantees  to  reflect  the  potential  for  their  value  to  decline  over  the  interval 
between  their  last  revaluation  and  the  time  by  which  they  can  reasonably  be 
assumed to be liquidated. It shall take into account the liquidity risk following the 
default  of  a  market  participant  and  the  concentration  risk  on  certain  assets  that 
may  result  in  establishing  the  acceptable  collateral  and  the  relevant  haircuts. 
When  revising  the  level  of  the  haircuts  it  applies  to  the  assets  it  accepts  as 
collateral,  the CCP shall take into account  any potential procyclicality effects of 
such revisions.’; 

(b) 

in paragraph 3, first subparagraph, point (b) is replaced by the following: 

‘(b) 

the haircuts referred to in paragraph 1, taking into account the objective to 
limit their procyclicality; and’; 

(34)  Article 49 is amended as follows: 

(a) 

paragraphs 1 to 1e are replaced by the following: 

‘1. A CCP shall regularly review the models and parameters adopted to calculate 
its  margin  requirements,  default  fund  contributions,  collateral  requirements  and 
other risk control mechanisms. It shall subject the models to rigorous and frequent 
stress  tests  to  assess  their  resilience  in  extreme  but  plausible  market  conditions 
and shall perform back tests to assess the reliability of the methodology adopted. 
The CCP shall obtain independent validation, shall inform its competent authority 
and ESMA of the results of the tests performed and shall obtain their validation in 

EN 

56 

  EN 

accordance  with  paragraphs  1a,  to  1e  before  adopting  any  significant  change  to 
the models. 

The adopted models, including any significant change thereto, shall be subject to 
an opinion of the college in accordance with this Article. 

ESMA shall ensure that information on the results of the stress tests is passed on 
to the ESAs, the ESCB and the Single Resolution Board to enable them to assess 
the exposure of financial undertakings to the default of CCPs. 

1a.  Where a CCP intends to adopt any significant change to the models referred 
to in paragraph 1, it shall submit an application for authorisation of such change in 
an electronic format via the central database referred to in Article 17(7) where it 
shall be immediately shared with the CCP’s competent authority, ESMA and the 
college. The CCP shall enclose an independent validation of the intended change 
to its application.  

Where a CCP considers that the change to the models referred to in paragraph 1 it 
intends  to  adopt  is  not  significant  as  referred  to  paragraph  1g,  the  CCP  shall 
request  that  the  application  be  subject  to  a  non-objection  procedure  under 
paragraph  1b.  In  that  case,  the  CCP  may  start  applying  such  change  before  the 
decision of the CCP’s competent authority and ESMA pursuant to paragraph 1b. 

The  CCP’s  competent  authority  shall,  in  cooperation  with  ESMA,  within  2 
working days after such application has been received, acknowledge receipt of the 
application, confirming to the CCP that it contains the required documents. Where 
one  of  them  concludes  that  the  application  does  not  contain  the  required 
documents, the application shall be rejected. 

1b.  Within 10 working days of the date referred to in the third subparagraph of 
paragraph  1a,  the  competent  authority  and  ESMA  shall  assess  if  the  proposed 
change qualifies  as a significant change pursuant to paragraph 1g. Where one of 
them  concludes  that  the  change  meets  one  of  the  conditions  referred  to  in 
paragraph 1g, the application shall be assessed under paragraphs 1c, 1d and1e and 
the  CCP’s  competent  authority,  in  cooperation  with  ESMA,  shall  inform  in 
writing the applicant CCP thereof.  

Where within 10 working days of the date referred to in the third subparagraph of 
paragraph 1a, the applicant CCP has not been informed in writing that its request 
for  the  non-objection  procedure  to  apply  has  been  denied,  that  change  shall  be 
deemed as validated. 

Where a request for the non-objection procedure has been denied, the CCP shall, 
within 5 working days from the notification referred to in the first subparagraph, 
no longer use that model change. Within 10 working days from that notification, 
the CCP shall either withdraw the application or complement the application with 
the independent validation of the change.  

1c.  Within 30 working days of the date referred to in the third subparagraph of 
paragraph 1a:  

(a) 

the  competent  authority  shall  conduct  a  risk  assessment  of  the  significant 
change and submit its report to ESMA and the college; 

(b)  ESMA shall conduct a risk assessment of the significant change and submit its 

report to the CCP competent authority and the college. 

EN 

57 

  EN 

1d.  Within 10 working days of receipt of the reports referred to in paragraph 1c, 
the CCP’s competent authority and ESMA shall each adopt a decision, taking into 
account  such reports and inform  each other of the decision taken. Where one of 
them has not validated the change, the validation shall be refused.  

1e.  Within 5 working days of the decisions being adopted under paragraph 1d, 
the competent authority and ESMA shall inform the CCP in writing, including a 
fully reasoned explanation, whether the validation has been granted or refused. 

(b) 

the following paragraphs 1f and 1g are inserted: 

1f. 
The CCP may not adopt any significant change to the models referred to in paragraph 
1,  before  obtaining  the  validations  by  its  competent  authority  and  ESMA.  The  competent 
authority,  in  agreement  with  ESMA,  may  allow  for  a  provisional  adoption  of  a  significant 
change  of  those  models  prior  to  their  validations  where  duly  justified  due  to  an  emergency 
situation  under  Article  24  of  this  Regulation.  Such  a  temporary  change  to  the  models  shall 
only  be  allowed  for  a  certain  period  of  time  jointly  specified  by  the  CCP’s  competent 
authority and ESMA. After the expiry of this period, the CCP shall not be allowed to use such 
model change unless it has been approved pursuant to paragraphs 1a, 1c, 1d and 1e. 

1g. 

A change shall be considered as significant where one of following conditions is met:   

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

the change leads to a decrease or increase of the total pre-funded financial 
resources,  including  margin  requirements,  default  fund  and  skin-in-the-
game, greater than 15 %;  

the  structure,  structural  elements  or  the  margin  parameters  of  the  margin 
model are changed or a margin module is introduced, removed, or amended 
in  a  manner  which  leads  to  a  decrease  or  increase  of  this  margin  module 
greater than 15 % at the CCP level;  

the methodology used to compute portfolio offsets  is  changed leading to  a 
decrease  or  increase  of  the  total  margin  requirements  for  these  financial 
instruments greater than 10 %;  

the  methodology  for  defining  and  calibrating  stress  test  scenarios  for  the 
purpose  of  determining  default  fund  exposures,  is  changed,  leading  to  a 
decrease or increase greater than 20 % of a default fund, or greater than 50 
% of any individual default fund contribution;  

the methodology applied to  assess liquidity risk and monitor concentration 
risk, is changed, leading to a decrease or increase of the estimated liquidity 
needs in any currency greater than 20 % or the total liquidity needs greater 
than 10 %;  

the  methodology  applied  to  value  collateral,  calibrate  collateral  haircut  or 
set  concentration  limits,  is  changed,  such  that  the  total  value  of  non-cash 
collateral  decreases  or  increases  by  more  than  10  %;  provided  that  the 
CCP’s  proposed  change  does  not  fulfil  any  criteria  for  the  extension  of 
CCP’s authorisation specified in Article 2(1); 

(g) 

any  other  change  to  the  models  that  could  have  a  material  effect  on  the 
overall risk of the CCP.” 

(c) 

paragraph 5 is replaced by the following: 

‘5.  ESMA shall, in close cooperation with the ESCB, develop draft regulatory 
technical standards specifying the list of required documents that shall accompany 

EN 

58 

  EN 

an  application  for  validation  pursuant  to  paragraph  1a  and  shall  specify  the 
information  such documents shall contain to  demonstrate that the CCP complies 
with all relevant requirements of this Regulation. 

ESMA shall submit those draft regulatory technical standards to the Commission 
by … [PO: please insert date =12 months after the date of entry into force of this 
Regulation] 

Power is delegated to the Commission to adopt the regulatory technical standards 
referred  to  in  the  first  subparagraph  in  accordance  with  Articles  10  to  14  of 
Regulation (EU) No 1095/2010.’; 

(d) 

the following paragraph 6 is added: 

‘6.  ESMA shall develop draft implementing technical standards specifying the 
electronic format of the application for validation referred to in paragraph 1a to be 
submitted to the central database. 

ESMA  shall  submit  those  draft  implementing  technical  standards  to  the 
Commission by…  [PO: please insert date = 12 months after the date of entry into 
force of this Regulation]. 

Power  is  conferred  on  the  Commission  to  adopt  the  implementing  technical 
standards  referred  to  in  the  first  subparagraph  in  accordance  with  Article 15  of 
Regulation (EU) No 1095/2010.’; 

(1) 

 in Article 54, paragraph 1 is replaced by the following: 

‘1.  An  interoperability  arrangement  shall  be  subject  to  the  prior  approval  of  the 
competent  authorities  of  the  CCPs  involved.  The  CCPs’  competent  authorities  shall 
request the opinion of ESMA in accordance with 24a(7), first subparagraph, point (bc), 
and  the  college  in  accordance  with  Article  19,  and  issued  in  accordance  with  the  
procedure set out in Article 17b.’; 

(2) 

In Article 82, paragraphs 2 and 3 are replaced by the following: 

“2.   The power to adopt delegated acts referred to in Articles 1(6), Article 3(5), Article 4(3a), 
Article  7a(6),  Article  17a(6),  Article  25(2a),  Article  25(6a),  Article  25a(3),  Article  25d(3), 
Article 25i(7), Article 25o, Article 64(7), Article 70, Article 72(3), and Article 85(2) shall be 
conferred to the Commission for an indeterminate period of time. 

3.      The  delegation  of  power  referred  to  in  Article  1(6),  Article  3(5),  Article  4(3a),  Article 
7a(6),  Article  17a(6),  Article  25(2a),  Article  25(6a),  Article  25a(3),  Article  25d(3),  Article 
25i(7), Article 25o, Article 64(7), Article 70, Article 72(3) and Article 85(2) may be revoked 
at any time by the European Parliament or by the Council. A decision to revoke shall put an 
end  to  the  delegation  of  the  power  specified  in  that  decision.  It  shall  take  effect  the  day 
following the publication of the decision in the Official Journal of the European Union or at a 
later  date  specified  therein.  It  shall  not  affect  the  validity  of  any  delegated  acts  already  in 
force. 

(3)  Article 85 is amended as follows;  

(a) 

paragraph 1 is replaced by the following:  

‘1.  By [PO: please insert the date =5 years after the date of entry into force of 
this  Regulation]  the  Commission  shall  assess  the  application  of  this  Regulation 
and  prepare  a  general  report.  The  Commission  shall  submit  that  report  to  the 

EN 

59 

  EN 

European  Parliament  and  to  the  Council,  together  with  any  appropriate 
proposals.’; 

(b) 

the following paragraph 1b is inserted:  

‘1b. 
By [PO: please insert the date = 1 year after the entry into force of this 
Regulation] ESMA shall submit a report to the Commission on the possibility and 
feasibility to require the segregation of accounts across the clearing chain of non-
financial and financial counterparties. The report shall be accompanied by a cost-
benefit analysis.’; 

(c) 

paragraph 7 is deleted; 

(4) 

 Article 90 is amended as follows: 

“By [PO please insert the date = please insert 3 years after the date of entry into force of this 
Regulation], ESMA shall assess the staffing and resources needs arising from the assumption 
of  its  powers  and  duties  in  accordance  with  this  Regulation  and  submit  a  report  to  the 
European Parliament, the Council and the Commission.” 

Article 2 

Amendments to Regulation (EU) No 575/2013  

Article 382 of Regulation (EU) No 575/2013 is amended as follows: 

(1) 

in paragraph 4, point (b) is replaced by the following: 

‘(b)  intragroup  transactions  entered  into  with  financial  counterparties  as  defined  in 
Article  2,  point  8,  of  Regulation  (EU)  No  648/2012,  financial  institutions  or  ancillary 
services undertakings that are established in the Union or that are established in a third 
country  that  applies  prudential  and  supervisory  requirements  to  those  financial 
counterparties,  financial  institutions  or  ancillary  services  undertakings  that  are  at  least 
equivalent  to  those  applied  in  the  Union,  unless  Member  States  adopt  national  law 
requiring the structural separation within a banking group, in which case the competent 
authorities may require those intragroup transactions between the structurally separated 
entities to be included in the own funds requirements;’ 

(2) 

the following paragraph [4c] is inserted: 

‘[4c]. For the purposes of paragraph 4, point (b), the Commission may adopt, by way of 
implementing  acts,  and  subject 
in 
Article 464(2),  a  decision  as  to  whether  a  third  country  applies  prudential  supervisory 
and regulatory requirements at least equivalent to those applied in the Union. 

the  examination  procedure  referred 

to 

to 

In the absence of such a decision, institutions may until 31 December 2027 continue to 
exclude  the  concerned  intragroup  transactions  from  the  own  funds  requirements  for 
CVA  risk  provided  that  the  relevant  competent  authorities  have  approved  the  third 
country as eligible for that treatment before 31 December 2026. Competent authorities 
shall notify the EBA of such cases by 31 March 2027.’ 

Article 3 

Amendments to Regulation (EU) 2017/1131 

Regulation (EU) 2017/1131 is amended as follows: 

(1) 

in Article 2, the following point (24) is added 

EN 

60 

  EN 

‘(24)  ‘CCP’ means a legal personas referred to in Article 2 (1) of Regulation (EU) No 

648/2012.’; 

(2)  Article 17 is amended as follows: 

(a) 

paragraph 4 is replaced by the following: 

‘4.  The aggregate risk exposure to the same counterparty of an MMF stemming 
from  derivative transactions which fulfil the conditions  set out  in Article 13 and 
which  are  not  centrally  cleared  through  a  CCP  authorised  in  accordance  with 
Article  14  of  Regulation  (EU)  No  648/2012  or  recognised  in  accordance  with 
Article 25 of that Regulation, shall not exceed 5 % of the assets of the MMF.’; 

(b) 

in paragraph 6, first subparagraph, point (c) is replaced by the following: 

‘(c) 

financial derivative instruments that are not centrally cleared through a CCP 
authorised  in  accordance  with  Article  14  of  Regulation  (EU)  No 648/2012 
or  recognised  in  accordance  with  Article  25  of  that  Regulation,  giving 
counterparty risk exposure to that body.’. 

Article 4 

Entry into force and application 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Commission 
The President 
Ursula VON DER LEYEN 

EN 

61 

  EN 

 
 
 
LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE 

1.1.  Title of the proposal/initiative 

1.2.  Policy area(s) concerned 

1.3.  The proposal/initiative relates to: 

1.4.  Objective(s) 

1.4.1. General objective(s) 

1.4.2. Specific objective(s) 

1.4.3. Expected result(s) and impact 

1.4.4. Indicators of performance 

1.5.  Grounds for the proposal/initiative 

1.5.1. Requirement(s)  to  be  met  in  the  short  or  long  term  including  a  detailed 
timeline for roll-out of the implementation of the initiative 

1.5.2. Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

1.5.3. Lessons learned from similar experiences in the past 

1.5.4. Compatibility  with  the  Multiannual  Financial  Framework  and  possible 
synergies with other appropriate instruments 

1.5.5. Assessment  of  the  different  available  financing  options,  including  scope  for 
redeployment 

1.6.  Duration and financial impact of the proposal/initiative 

1.7.  Management mode(s) planned 

2.  MANAGEMENT MEASURES 

2.1.  Monitoring and reporting rules 

2.2.  Management and control system(s) 

2.2.1. Justification  of 
mechanism(s), the payment modalities and the control strategy proposed 

the  management  mode(s), 

funding 

the 

implementation 

2.2.2. Information  concerning the risks identified and the internal control  system(s) 
set up to mitigate them 

2.2.3. Estimation  and  justification  of  the  cost-effectiveness  of  the  controls  (ratio  of 
"control  costs  ÷  value  of  the  related  funds  managed"),  and  assessment  of  the 
expected levels of risk of error (at payment & at closure) 

2.3.  Measures to prevent fraud and irregularities 

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE 

EN 

62 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.1.  Heading(s)  of  the  multiannual  financial  framework  and  expenditure 
budget line(s) affected 

3.2.  Estimated financial impact of the proposal on appropriations 

3.2.1. Summary of estimated impact on operational appropriations 

3.2.2. Estimated output funded with operational appropriations 

3.2.3. Summary of estimated impact on administrative appropriations 

3.2.4. Compatibility with the current multiannual financial framework 

3.2.5. Third-party contributions 

3.3.  Estimated impact on revenue 

EN 

63 

  EN 

 
 
 
 
 
 
 
 
LEGISLATIVE FINANCIAL STATEMENT 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative 

Proposal for a Regulation of the European Parliament and of the Council amending 
Regulation  (EU)  No  648/2012  of  the  European  Parliament  and  of  the  Council  of  4 
July 2012 on OTC derivatives, central counterparties and trade repositories amending 
Regulations  (EU) No 648/2012,  (EU) No 575/2013 and  (EU) 2017/1131  Text  with 
EEA relevance.  

1.2. 

Policy area(s) concerned  

Internal Market – Financial Services. 

1.3. 

The proposal/initiative relates to:  

 a new action  
 a new action following a pilot project/preparatory action40  

 the extension of an existing action  

 a merger or redirection of one or more actions towards another/a new action  

1.4. 

Objective(s) 

1.4.1.  General objective(s) 

Promote financial stability and strengthen the Capital Markets Union (CMU). 

1.4.2. 

Specific objective(s) 

This proposal has the following specific objectives to achieve the general objectives 
for the EU internal market for central clearing services: 

Encourage  clearing  at  EU  CCPs  and  reduce  excessive  reliance  on  systemic 

- 
non-EU CCP by building a more attractive and robust EU clearing market.  

Ensure  that  the  supervisory  framework  for  EU  CCPs  is  sufficient  to  manage 
-  
the  risks  associated  with  the  interconnectedness  of  the  EU  financial  system  and 
increasing  clearing  volumes,  in  particular  in  respect  to  cross-border  risks,  as  these 
risks could be further amplified as EU clearing markets grow. 

Expected result(s) and impact 

Specify 
the  effects  which 
beneficiaries/groups targeted. 

the  proposal/initiative 

should  have  on 

the 

The  proposal  aims  to  strengthen  the  EU  clearing  market  by  improving  the 
attractiveness  of  EU  CCPs,  encouraging  clearing  in  EU  CCPs  and  enhancing  the 
assessment and management of cross-border risks.  

40 

As referred to in Article 58(2)(a) or (b) of the Financial Regulation. 

EN 

64 

  EN 

 
                                                 
1.4.3. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

For each specific objective the following performance indicators have been set.  

Improve the attractiveness of EU CCPs: 

Measured  by  %  of  contracts  cleared  by  EU  clearing  participants  in  EU  and  third-
country CCPs. 

Number of new EU CCP products approved. 

Time taken on average (number of days) to approve new CCP products and validate 
model changes. 

Number of non-objection procedures completed. 

Encourage clearing in EU CCPs: 

Average amounts on active accounts at EU CCPs. 

Transactions  cleared  in  EU  CCPs  in  different  currencies  (absolute  value  and 
compared to global markets). 

Number of clearing members and clients in EU CCPs. 

Volume  of  contracts  cleared  outside  EU  CCPs  by  EU  actors  or  for  EU-currency 
denominated contracts. 

Enhancing the assessment of cross-border risks: 

Number of opinions issued by ESMA per year. 

Number of cases where NCAs deviate from ESMA opinions.  

Number of joint supervisory teams established and tasks performed.  

Number of times ESMA coordinated information requests or asked. 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

The  requirements  this  proposal  aims  to  meet  are  to  have  modern  and  competitive 
CCPs  in  the  EU  that  can  attract  business  while  at  the  same  time  having  safe  and 
resilient EU CCPs and enhance the EU’s open strategic autonomy. 

With the implementation of this proposal including its intended further development 
in  level  2,  the  requirements  are  expected  –  subject  to  the  agreement  by  the  co-
legislators – to be absorbed by both the supervisory community as well as the market 
at the latest by June 2025. 

1.5.2.  Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

Reasons for action at European level (ex-ante) 

EN 

65 

  EN 

 
The EU clearing market is an inseparable part of the EU financial market. As such, 
EU action should ensure that EU financial market participants do not face too high 
risks due to the excessive reliance on systemic third-country CCPs where in case of 
distress, decisions would be taken by third-country authorities prevent the EU from 
the option to intervene in emergency situations. 

Expected generated Union added value (ex-post)  

The  objectives  of  EMIR,  namely  to  regulate  derivatives  transactions,  promote 
financial stability and to make markets more transparent, more standardised, and thus 
safer,  are  an  essential  building  block  for  a  successful  EU  financial  internal  market, 
especially  regarding  the  cross  –  border  component.  Member  States  and  national 
supervisors cannot solve on their own or address cross-border risks related to central 
clearing within the EU or the framework for third-country CCPs. 

1.5.3.  Lessons learned from similar experiences in the past 

This proposal takes into account experiences gained with previous versions of EMIR.  

EMIR  regulates  derivatives  transactions,  including  measures  to  limit  their  risks 
through  CCPs.  It  was  adopted  in  the  wake  of  the  2008/2009  financial  crisis  to 
promote financial stability and to make markets more transparent, more standardised, 
and  thus  safer.  Similar  reforms  were  implemented  in  most  G20  countries.  EMIR 
requires that derivatives transactions are reported to ensure market transparency for 
regulators  and  supervisors;  and  that  their  risks  are  appropriately  mitigated  through 
centrally clearing at a CCP or exchanging collateral, known as ‘margin’, in bilateral 
transactions.  CCPs  and  the  risks  they  manage  have  grown  considerably  since  the 
adoption of EMIR. 

In 2017, the Commission published two legislative proposals amending EMIR, both 
adopted by the co-legislators in 2019. EMIR REFIT41 recalibrated some of the rules 
to ensure their proportionality, while ensuring financial stability. Acknowledging the 
emerging issues related to the increasing concentration of risks in CCPs, in particular 
third-country  CCPs,  EMIR  2.242  revised  the  supervisory  framework  and  set  out  a 
process  for  assessing  the  systemic  nature  of  third-country  CCPs  by  ESMA  in 
cooperation with the European Systemic Risk Board (ESRB) and the central banks of 
issue. EMIR was complemented by the CCP Recovery and Resolution Regulation43, 
adopted in 2020, to prepare for the unlikely – though massively impactful - event that 
an EU CCP faces severe distress. Financial stability is at the core of these pieces of 
EU  legislation.  Since  2017,  concerns  have  been  repeatedly  expressed  about  the 
ongoing risks to the EU financial stability arising from the excessive concentration of 

41 

42 

43 

Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending 
Regulation  (EU)  No  648/2012  as  regards  the  clearing  obligation,  the  suspension  of  the  clearing 
obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not 
cleared  by  a  central  counterparty,  the  registration  and  supervision  of  trade  repositories  and  the 
requirements for trade repositories (Text with EEA relevance.); OJ L 141, 28.5.2019, p. 42–63. 
Regulation  (EU)  2019/2099  of  the  European  Parliament  and  of  the  Council  of  23  October  2019 
amending  Regulation  (EU)  No  648/2012  as  regards  the  procedures  and  authorities  involved  for  the 
authorisation  of  CCPs  and  requirements  for  the  recognition  of  third-country  CCPs;  OJ  L  322, 
12.12.2019, p. 1–44. 
Regulation  (EU)  2021/23  of  the  European  Parliament  and  of  the  Council  of  16  December  2020  on  a 
framework for the recovery and resolution of central counterparties, OJ L 22, 22.1.2021, p. 1–102. 

EN 

66 

  EN 

 
                                                 
clearing in some third-country CCPs, notably the potential risks in a stress scenario. 
Furthermore,  high-risk  but  low-probability  events  can  happen  and  the  EU  must  be 
prepared to face them.  While EU CCPs have generally proven resilient throughout 
these  developments,  experience  has  shown  that  the  EU  clearing  ecosystem  can  be 
made stronger, to the benefit of financial stability. However, in order to ensure open 
strategic autonomy the EU needs to safeguard itself against the risks which can arise 
when EU market participants are excessively reliant on third-country entities, as this 
can be a source of vulnerabilities. 

The experiences gained with EMIR as outlined above, are taken into account in the 
design of the new proposed requirements. 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

This proposal and its specific requirements are in line with the current arrangements 
for  financial  services  within  the  Multiannual  Financial  Framework  (MFF)  and 
aligned  with  standard  practices  of  putting  the  EU  budget  to  work  and  in  line  with 
current  the  Commission  services’  practices  in  planning  and  budgeting  for  new 
proposals. 

In addition, the objectives of the initiative are consistent with other EU policies and 
ongoing initiatives that aim to: (i) develop the CMU, and (ii) enhance the efficiency 
and effectiveness of EU-level supervision, both within and outside the EU.  

First,  it  is  consistent  with  the  Commission's  ongoing  efforts  to  further  develop  the 
Capital  Markets  Union  ('CMU')44.  The  issues  addressed  by  this  proposal  affect  EU 
financial stability  as they  obstruct  the reduction of excessive exposures to systemic 
CCPs  and  constitute  a  significant  impediment  to  developing  an  efficient  and 
attractive  EU  clearing  market,  a  foundation  stone  for  a  deep  and  liquid  CMU.  The 
urgency of further developing and integrating EU capital markets was stressed in the 
Action Plan on CMU of September 2020. 

Second,  it  is  consistent  with  the  Commission  services’  experience  with  the 
implementation  and  enforcement  of  third-country  provisions  in  EU  financial 
legislation and implements practical experience gained by the Commission services 
when approaching these tasks in practice. 
Third, it is consistent with the EU open strategic autonomy45 objective.  

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

N/A 

44 

45 

Communication  from  the  Commission,  A  Capital  Markets  Union  for  people  and  businesses  –  New 
action plan, COM(2020) 590 
Communication  from the Commission to the European Parliament,  the Council, the European Central 
Bank, the European Economic and Social Committee and the Committee of the Regions: The European 
economic and financial system: fostering openness, strength and resilience COM/2021/32 final. 

EN 

67 

  EN 

                                                 
1.6. 

Duration and financial impact of the proposal/initiative 

 limited duration  

 in effect from [DD/MM]YYYY to [DD/MM]YYYY  

 Financial impact from YYYY to YYYY for commitment appropriations and from 

YYYY to YYYY for payment appropriations.  

 unlimited duration 

Implementation with a start-up period from YYYY to YYYY, 

followed by full-scale operation. 

1.7.  Management mode(s) planned46  

 Direct management by the Commission 

 by its departments, including by its staff in the Union delegations;  

 by the executive agencies  

 Shared management with the Member States  

 Indirect management by entrusting budget implementation tasks to: 

 third countries or the bodies they have designated; 

 international organisations and their agencies (to be specified); 

 the EIB and the European Investment Fund; 

 bodies referred to in Articles 70 and 71 of the Financial Regulation; 

 public law bodies; 

  bodies  governed  by  private  law  with  a  public  service  mission  to  the  extent  that 

they are provided with adequate financial guarantees; 

 bodies governed by the private law of a Member State that are entrusted with the 
implementation  of  a  public-private  partnership  and  that  are  provided  with 
adequate financial guarantees; 

  persons  entrusted  with  the  implementation  of  specific  actions  in  the  CFSP 

pursuant to Title V of the TEU, and identified in the relevant basic act. 

If  more  than  one  management  mode  is  indicated,  please  provide  details  in  the 

‘Comments’ section. 

Comments  

N/A 

46 

Details  of  management  modes  and  references  to  the  Financial  Regulation  may  be  found  on  the 
site: 
BudgWeb 
https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx  

EN 

68 

  EN 

                                                 
2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

In  line  with  already  existing  arrangements  ESMA  prepares  regular  reports  on  its 
activity  (including  internal  reporting  to  Senior  Management,  Management  Board 
reporting,  six  month  activity  reporting  to  the  Board  of  Supervisors  and  the 
production of the annual report), and undergoes audits by the Court of Auditors and 
the Internal Audit Service on its use of resources. In addition the proposal provides 
some further monitoring and reporting obligations on ESMA in  relation  to the new 
features  of  the  Regulation,  including  the  active  account.  The  Commission  shall 
provide a report 5 years after the Regulation enter into force.  

2.2.  Management and control system(s)  

2.2.1. 

Justification of the management mode(s), the funding implementation mechanism(s), 
the payment modalities and the control strategy proposed 

In  relation  to  the  legal,  economic,  efficient  and  effective  use  of  appropriations 
resulting  from  the  proposal,  it  is  expected  that  the  proposal  would  not  bring  about 
new  risks  that  would  not  be  currently  covered  by  an  existing  internal  control 
framework. 

2.2.2. 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

Management  and  control  systems  as  provided  for  in  the  ESMA  Regulation  are 
already implemented. ESMA works closely together with the Internal Audit Service 
of  the  Commission  to  ensure  that  the  appropriate  standards  are  met  in  all  internal 
controls areas. These arrangements will apply also with regard to the role of ESMA 
according  to  the  present  proposal.  Annual  internal  audit  reports  are  sent  to  the 
Commission, Parliament and Council. 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio of "control 
costs ÷ value of the related funds managed"), and assessment of the expected levels 
of risk of error (at payment & at closure)  

N/A 

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures, e.g. from the Anti-
Fraud Strategy. 

For  the  purposes  of  combating  fraud,  corruption  and  any  other  illegal  activity,  the 
provisions  of  Regulation  (EU,  Euratom)  No  883/2013  of  the  European  Parliament 
and of the Council of 11 September 2013 concerning investigations conducted by the 
European Anti-Fraud Office (OLAF) and repealing Regulation  (EC)  No  1073/1999 
of the European Parliament and of the Council and Council Regulation (Euratom) No 
1074/1999 apply to ESMA without any restrictions.  

ESMA has acceded to the Interinstitutional Agreement of 25 May 1999 between the 
European Parliament, the Council of the European Union and the Commission of the 

EN 

69 

  EN 

European  Communities  concerning  internal  investigations  by  the  European  Anti-
Fraud Office (OLAF) and adopt appropriate provisions for all ESMA staff. 

The  funding  decisions  and  the  agreements  and  the  implementing  instruments 
resulting from them explicitly stipulate that the Court of Auditors and OLAF may, if 
need  be,  carry  out  on  the  spot  checks  on  the  beneficiaries  of  monies  disbursed  by 
ESMA as well as on the staff responsible for allocating these monies. 

EN 

70 

  EN 

3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Heading 
of 
multiann
ual 
financial 
framewo
rk 

Number  

Type of  
expendit
ure 

Diff./No
n-diff.47 

Contribution  

from 
EFTA 
countri
es48 

from 
candidat
e 
countrie
s49 

from 
third 
countri
es 

within the 
meaning of 
Article 21(2
)(b) of the 
Financial 
Regulation  

[XX.YY.YY.YY] 

Diff./No
n-diff. 

YES/N
O 

YES/N
O 

YES/N
O 

YES/NO 

New budget lines requested  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Heading 
of 
multiann
ual 
financial 
framewo
rk 

Number  

[XX.YY.YY.YY] 

Type of 
expendit
ure 

Diff./No
n-diff. 

Contribution  

from 
EFTA 
countri
es 

from 
candidat
e 
countrie
s 

from 
third 
countri
es 

within the 
meaning of 
Article 21(2
)(b) of the 
Financial 
Regulation  

YES/N
O 

YES/N
O 

YES/N
O 

YES/NO 

47 
48 
49 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

EN 

71 

  EN 

 
 
 
 
 
 
 
 
 
                                                 
3.2. 

Estimated financial impact of the proposal on appropriations  

This  legislative  initiative  will  have  no  impact  on  expenditures  for  the  European  Securities  and  Markets  Authority  (ESMA)  or  other 
bodies of the European Union.  

ESMA:  The  impact  assessment  identified  only  moderate  additional  costs  for  ESMA,  while  at  the  same  time  the  proposed  measures 
create  efficiencies  that  will  lead  to  cost  reductions.  In  addition,  some  provisions  clarify  and  recalibrate  the  role  of  ESMA  whilst  not 
constituting new tasks and are therefore to be considered budget neutral.  

Costs identified relate to the setting up  and operation of a new  IT tool for the submission  of supervisory documents. However, even 
though ESMA might incur higher costs related to developing or choosing such a new IT tool as well as operating it, this IT tool will also 
create efficiencies and ESMA will benefit from those. These efficiencies relate to considerably less manual work in the reconciliation 
and  sharing  of  documents,  the  following  up  on  deadlines  and  questions  as  well  as  coordination  with  national  competent  authorities 
(NCAs), the college and the CCP Supervisory Committee. These benefits are likely to outweigh the costs incurred. 

Furthermore, initial additional (paper-)work related to the modification of tools and procedures, as well as to enhanced cooperation, may 
increase costs initially, but  is  likely to  be reduced, or remain stable, over time. Notably, ESMA  will be required to  draft regulatory / 
implementing technical  standards (RTS/ITS) on the format and content of the documents CCPs are required to submit to supervisory 
authorities,  the  specification  of  the  requirement  for  clearing  members  and  clients  to  have  an  active  account  at  a  Union  CCP,  the 
calculation  methodology  to  be  used  to  calculate  the  proportion,  the  scope  and  details  of  the  reporting  by  EU  clearing  members  and 
clients to their competent authorities on their clearing activity in third-country CCPs and whilst providing the mechanisms triggering a 
review of the values of the clearing thresholds following significant price fluctuations in the underlying class of OTC derivatives to also 
review the scope of the hedging exemption and thresholds for the clearing obligation to apply as well as an annual report on the results 
of their monitoring activity. In undertaking those activities, ESMA can build on already existing internal processes and procedures, and 
it may convert, where relevant, those procedures into RTSs/ITSs. In defining the active account requirement, for some already identified 
instruments, and their ongoing monitoring, ESMA can take into account the work it has undertaken under Article 25(2c) of EMIR when 
assessing which Tier 2 CCPs’ clearing services are of substantial systemic importance to the Union or one or more of its Member States 
and might therefore only require some very limited additional resources. 

Another category to be considered in the cost analysis is the modification of procedures and tools to the new supervisory cooperation 
framework.  The  cooperation  in  joint  supervisory  teams  and  the  establishment  of  a  joint  monitoring  mechanism  at  EU  level  are  new 
elements in the supervisory framework. However, they are mainly tools to improve the cooperation between authorities and cover tasks 
that are already, in all essential parts, performed by the authorities, except for the monitoring of the implementation of the requirements 
set out for active accounts at EU CCPs, such as fees for access charged by CCPs to clients for active accounts. These new structures will 
likely require some reorganisation of staff and potentially create the need for additional meetings but will not have substantial budgetary 

EN 

72 

EN 

 
 
implications.  Moreover,  the  recalibrated  supervisory  process  also  comes  with  benefits,  notably  clearer  responsibilities  avoiding 
unnecessary  duplicative  work  and  less  work  due  to  the  introduction  of  non-objection  procedures  which  enable  ESMA  and  NCAs  to 
focus on the material aspects of supervision in relation to the extension of clearing services and changes to CCPs’ risk models. 

The proposed approach towards third-country CCPs that refuse to pay fees to ESMA consists in issuing a public notice after 6 months 
due and initiate the withdrawal of recognition after 1 year due. This change will be positive in terms of costs. This avoids ESMA from 
having to invest a considerable amount of work without getting remunerated for it.  

In addition, further provisions are introduced which clarify and recalibrate the role of ESMA and are therefore to be considered budget 
neutral.  For  instance,  ESMA  already  has  the  obligation  to  issue  opinions  in  relation  to  certain  aspects  of  supervision,  however  the 
content of those opinions is recalibrated to ensure a higher degree of efficiency in the supervisory process and ESMA is given a formal 
opportunity to issue an opinion on CCPs’ annual review and evaluation as well as on the withdrawal of their authorisation and to take a 
clear  role  in  coordinating  emergency  situations.  These  are  tasks  that,  in  all  material  respects,  relate  to  their  already  existing  ongoing 
work and the provisions clarify and therefore strengthen ESMA’s position, providing clear responsibilities. 

Other  European  Union  bodies:  Even  though  smaller  changes  to  the  role  of  other  European  Union  bodies,  such  as  the  European 
Commission or the European Central Bank, are introduced, they will not have budgetary implications. 

3.2.1. 

Summary of estimated impact on operational appropriations  

 The proposal/initiative does not require the use of operational appropriations  

 The proposal/initiative requires the use of operational appropriations, as explained below: 

Heading of multiannual financial  
framework  

Number 

EUR million (to three decimal places) 

DG: <…….> 

Year 
N50 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the 

TOTAL 

50 

Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same  for the 
following years. 

EN 

73 

EN 

 
 
 
 
 
 
                                                 
duration of the impact 
(see point 1.6) 

 Operational appropriations  

Budget line51 

Budget line 

Commitmen
ts 

(1a) 

Payments 

(2a) 

Commitmen
ts 

(1b) 

Payments 

(2b) 

Appropriations  of  an  administrative  nature  financed  from 
the envelope of specific programmes52  

Budget line 

TOTAL appropriations 
for DG <…….> 

Commitmen
ts 

Payments 

(3) 

=1a
+1b 
+3 

=2a
+2b 

+3 

51 
52 

According to the official budget nomenclature. 
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

74 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 TOTAL operational appropriations  

Commitmen
ts 

Payments 

 TOTAL  appropriations of an administrative nature 
financed from the envelope for specific programmes  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING <….> 
of the multiannual financial 
framework 

Commitmen
ts 

=4+ 
6 

Payments 

=5+ 
6 

If more than one operational heading is affected by the proposal / initiative, repeat the section above: 

  TOTAL  operational  appropriations 
(all operational headings) 

Commitmen
ts 

Payments 

 TOTAL  appropriations  of  an  administrative  nature 
financed  from  the  envelope for specific programmes 
(all operational headings) 

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADINGS 1 to 6 
of the multiannual financial 
framework 
(Reference amount) 

Commitmen
ts 

=4+ 
6 

Payments 

=5+ 
6 

EN 

75 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Heading of multiannual financial  
framework  

7 

‘Administrative expenditure’ 

This  section  should  be  filled  in  using  the  'budget  data  of  an  administrative  nature'  to  be  firstly  introduced  in  the  Annex  to  the  Legislative 
Financial Statement (Annex V to the internal rules), which is uploaded to DECIDE for interservice consultation purposes. 

EUR million (to three decimal places) 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the 
duration of the impact 
(see point 1.6)  

TOTAL 

DG: <…….> 

 Human resources  

 Other administrative expenditure  

TOTAL DG <…….> 

Appropriations  

TOTAL appropriations 
under HEADING 7 
of the multiannual financial 
framework  

(Total 
commitments 
Total payments) 

= 

Year  Year  Year  Year 

Enter as many years as 

TOTAL 

EUR million (to three decimal places) 

EN 

76 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N53 

N+1 

N+2 

N+3 

necessary to show the 
duration of the impact 
(see point 1.6) 

TOTAL appropriations  
under HEADINGS 1 to 7 
of the multiannual financial 
framework  

Commitments 

Payments 

3.2.2.  Estimated output funded with operational appropriations  

Commitment appropriations in EUR million (to three decimal places) 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as necessary 
to show the duration of the impact 
(see point 1.6) 

TOTAL 

OUTPUTS 

o
N

Cost  N

o

Cost  N

o

Cost  N

o

Cost  N

  Cos
o

o

t  N

Cost  N

o

Cost 

Tota
l No 

Total 
cost 

Indicate 
objectives 
and outputs  

 

Type
54 

Aver
age 
cost 

SPECIFIC OBJECTIVE 
No 155… 

53 

54 
55 

Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same  for the 
following years. 
Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 
As described in point 1.4.2. ‘Specific objective(s)…’  

EN 

77 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
- Output 

- Output 

- Output 

Subtotal for specific 
objective No 1 

SPECIFIC OBJECTIVE 
No 2 ... 

- Output 

Subtotal for specific 
objective No 2 

TOTALS 

EN 

78 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3. 

Summary of estimated impact on administrative appropriations  

 The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

 The  proposal/initiative  requires  the  use  of  appropriations  of  an  administrative 

nature, as explained below: 

EUR million (to three decimal places) 

Year 
N 56 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

HEADING 7 
of the 
multiannual 
financial 
framework 

Human resources  

Other 
administrative 
expenditure  
Subtotal 
HEADING 7 
of the 
multiannual 
financial 
framework  

Outside 
HEADING 757  
of the 
multiannual 
financial 
framework  

Human resources  

Other 
expenditure  
of 
administrative 
nature 

an 

Subtotal  
outside 
HEADING 7 
of the 
multiannual 
financial 
framework  

56 

57 

Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first 
year of implementation (for instance: 2021). The same for the following years. 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU programmes 
and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

79 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
TOTAL 

The appropriations required for human resources and other expenditure of an administrative 
nature will be met by appropriations from the DG that are already assigned to management of 
the  action  and/or  have  been  redeployed  within  the  DG,  together  if  necessary  with  any 
additional allocation which may be granted to the managing DG under the annual allocation 
procedure and in the light of budgetary constraints. 

EN 

80 

  EN 

 
 
 
 
 
 
 
 
 
 
3.2.3.1.  Estimated requirements of human resources  

 The proposal/initiative does not require the use of human resources.  

 The proposal/initiative requires the use of human resources, as explained below: 

Estimate to be expressed in full time equivalent units 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years 
as necessary to 
show the duration 
of the impact (see 
point 1.6) 

 Establishment plan posts (officials and temporary staff) 

01 

(Headquarters 
01 
20 
Commission’s Representation Offices) 

02 

and 

20 01 02 03 (Delegations) 

01 01 01 01  (Indirect research) 

 01 01 01 11 (Direct research) 

Other budget lines (specify) 

 External staff (in Full Time Equivalent unit: FTE)58 

20  02  01  (AC,  END,  INT  from  the  ‘global 
envelope’) 

20 02 03 (AC, AL, END, INT and JPD in the 
delegations) 

XX 01  xx yy zz  59 

- at Headquarters 

- in Delegations  

01  01  01  02  (AC,  END,  INT  -  Indirect 
research) 

 01  01  01  12  (AC,  END,  INT  -  Direct 
research) 

Other budget lines (specify) 

TOTAL 

XX is the policy area or budget title concerned. 

58 

59 

AC=  Contract  Staff;  AL  =  Local  Staff;  END=  Seconded  National  Expert;  INT  =  agency  staff; 
JPD= Junior Professionals in Delegations.  
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines). 

EN 

81 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
The  human  resources  required  will  be  met  by  staff  from  the  DG  who  are  already 
assigned to  management  of the action and/or have been redeployed within  the DG, 
together  if  necessary  with  any  additional  allocation  which  may  be  granted  to  the 
managing  DG  under  the  annual  allocation  procedure  and  in  the  light  of  budgetary 
constraints. 

Description of tasks to be carried out: 

Officials and temporary staff 

External staff 

EN 

82 

  EN 

 
 
 
3.2.4.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

 can  be  fully  financed  through  redeployment  within  the  relevant  heading  of  the 

Multiannual Financial Framework (MFF). 

Explain what reprogramming is required, specifying the budget lines concerned and 
the  corresponding  amounts.  Please  provide  an  excel  table  in  the  case  of  major 
reprogramming. 

 requires  use  of  the  unallocated  margin  under  the  relevant  heading  of  the  MFF 

and/or use of the special instruments as defined in the MFF Regulation. 

Explain  what  is  required,  specifying  the  headings  and  budget  lines  concerned,  the 
corresponding amounts, and the instruments proposed to be used. 

 requires a revision of the MFF. 

Explain what is required, specifying the headings and budget lines concerned and the 
corresponding amounts. 

3.2.5.  Third-party contributions  

The proposal/initiative: 

 does not provide for co-financing by third parties 

 provides for the co-financing by third parties estimated below: 

Appropriations in EUR million (to three decimal places) 

Year 
N60 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the 
duration of the impact (see 
point 1.6) 

Total 

Specify 
the 
financing body  

co-

TOTAL 
appropriations 
financed  

co-

60 

Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the 
expected first year of implementation (for instance: 2021). The same for the following years. 

EN 

83 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.3. 

Estimated impact on revenue  

 The proposal/initiative has no financial impact on revenue. 

 The proposal/initiative has the following financial impact: 

 

 

on own resources  

on other revenue 

please indicate, if the revenue is assigned to expenditure lines  

     EUR million (to three decimal places) 

Impact of the proposal/initiative61 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

Appropriat
ions 
available 
for the 
current 
financial 
year 

Budget 
line: 

revenue 

Article …………. 

For assigned revenue, specify the budget expenditure line(s) affected. 

[…] 

Other  remarks  (e.g.  method/formula  used  for  calculating  the  impact  on  revenue  or 
any other information). 

61 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 20 % for collection costs. 

EN 

84 

  EN