Regulation (EU) 2024/2987

What it is

to increase the safety and efficiency of Union central counterparties (CCPs) by improving their attractiveness, encouraging clearing in the Union and enhancing the cross-border consideration of risks. PROPOSED ACT: Regulation of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: Regulation (EU) No 648/2012 (the European Market Infrastructure Regulation or EMIR) regulates derivatives transactions, including measures to limit their risks through clearing in central counterparties (CCPs). 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. The Committee on Economic and Monetary Affairs adopted the report by Danuta Maria HÜBNER (EPP, PL) on the 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. The committee responsible recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows: The amended text set a solid active account requirement (AAR) that will require certain financial and non-financial counterparties to have an account at an EU CCP , which includes operational elements such as the ability to handle the counterparty’s transactions at short notice if need be and activity elements so that the account is effectively used. This is ensured by a number of requirements, which have to be fulfilled by these accounts, including requirements for counterparties above a certain threshold to clear trades in the most relevant sub-categories of derivatives of substantial systemic importance defined in terms of class of derivative, size and maturity. Each authorised CCP authorised should be subject to joint supervisory activities. Those activities should be coordinated by ESMA and the college in the context of the annual review and evaluation process and should be open for the participation of each college member on a voluntary basis. ESMA should be in charge of establishing and coordinating the joint supervisory activities. 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, the report noted the need 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…

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