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MARKETS MEDIA

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 * EU Council Adopts Revamped Rules for Clearing

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Sectors
11.21.2024

From The Markets


EU COUNCIL ADOPTS REVAMPED RULES FOR CLEARING

11.21.2024

The Council adopted new rules on clearing services that revise the European
market infrastructure regulation and directive (EMIR). The new rules aim to make
the EU clearing landscape more attractive and resilient, to support the EU’s
open strategic autonomy and to preserve the EU’s financial stability.

The European Market Infrastructure Regulation (EMIR) lays down rules on
over-the-counter (OTC) derivatives, central counterparties (CCPs) and trade
repositories.

The new rules improve EU clearing services by streamlining and shortening
procedures, improving consistency between rules and strengthening CCP
supervision. In particular, the new rules will contribute to reducing excessive
reliance on systemic CCPs in non-EU countries, by requiring all relevant market
participants to hold active accounts at EU CCPs and clear a representative
portion of certain systemic derivative contracts within the single market.


NEXT STEPS

The revised EMIR regulation and directive will be published in the EU’s Official
Journal before entering into force 20 days later.


BACKGROUND

Derivatives play an important role in the economy, but they also bring certain
risks. This was demonstrated during the 2008 financial crisis, that brought to
light the weaknesses in the OTC derivatives markets.

To address the situation, the EU adopted the European market infrastructure
regulation (EMIR) in 2012. The aim was to increase transparency in the OTC
derivatives markets, mitigate credit risk and reduce operational risk.



On 7 December 2022, the Commission presented a proposal to review European
market infrastructure regulation and directive in order to deepen the EU’s
capital markets union, improve the existing rules and make the EU’s clearing
landscape more attractive.



Adoption by the Council follows an agreement reached with the European
Parliament at first reading under the ordinary legislative procedure.

Source: European Council


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