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Mandated levels of EU Clearing run counter to competitive and efficient clearing systems

21 March 2023 | Press Release
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EFAMA has today published its response to the European Commission’s EMIR 3.0 proposal. We support the EC’s goal of increasing the attractiveness of EU central clearing counterparties (CCPs), including simplified product approvals, faster model change authorisations, and greater margin model transparency. A new clearing threshold calculation is also proposed, which further aligns the Clearing Obligation with the rest of the EMIR regulation.  


However, the objective of maintaining a competitive and efficient clearing ecosystem would be undermined by the proposal to introduce mandated active accounts at EU CCPs. Asset managers require a free choice of CCP in order to fulfil their fiduciary duty to act in their client’s best interest and obtain the best investment outcomes. The measures to enhance EU CCP attractiveness should in themselves draw greater clearing activity organically, without the need to introduce an active account obligation.


Specifically, the EC’s active accounts proposal leaves open a number of key questions, including the methodology for determining the clearing thresholds and the level at which they would apply (client, fund or investment manager). The principle of active accounts is problematic in other ways too:


  • It forces the splitting-up of accounts and creates diversion to a smaller liquidity pool which will increase spreads and reduce the netting benefits available to clearing clients, with the impact passed on to the end-investor.
  • It underestimates the required operational build to implement active accounts.  Many clearing clients would have to move from a mono-clearing channel to a dual clearing channel with the accompanying subscription costs and technical set-up.
  • Another overlooked element is the ongoing monitoring and calculation activity required to manage two separate trading flows which must meet externally set thresholds .


Finally, the removal of FX forwards and swaps (hedging instruments) from the clearing threshold calculation would be useful, based on the same rationale that sees them excluded from variation margin requirements today. Such an exclusion is already applied to Non-Financial Counterparties. EFAMA further supports the conversion of the temporary exemption from margining requirements for single stock and equity index options into a permanent exemption as this would level the global playing field and ensure the competitiveness of EU firms.


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Note to editors :

You can find additional information on the European Commission’s consultation on EMIR 3.0 here.


For further information, please contact:

Hayley McEwen

Head of Communication & Membership Development

Tel: +32 2 548 26 52


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