EMIR 3.0: Detailed views on active accounts

EFAMA published a detailed analysis of the proposed active accounts in EMIR 3.0 by the EC. It discusses the potential impacts of active accounts on clearing markets, focusing on financial stability risks, costs to end investors, organic growth on Eurex, measures to enhance EU CCP attractiveness, expansion of ESMA’s supervisory toolbox, and EFAMA’s recommendations on Euroclearing reform.
In terms of financial stability risks, the paper questions whether strengthened supervisory cooperation between supervisors and central banks should be a priority alongside reducing exposures. It argues that artificially fragmented liquidity resulting from active accounts could introduce greater financial stability risks. The analysis also points out that the ESMA report on EMIR 25 does not consider the impact of active accounts and that the EC has not provided an impact assessment on the stability risk impacts of active accounts.
Regarding costs to end investors, the paper highlights two main cost factors: operational build-out and the larger impact of loss of netting efficiencies. It argues that the active account requirement may lead to discrimination among clients, as those subject to the clearing obligation would be limited to prices on offer at the EU CCP, while those clearing voluntarily would receive better prices. This would undermine the principle of best execution and make European firms less competitive. The paper also discusses margin analysis and provides case studies showing the potential increase in margin requirements and the loss of netting efficiencies with active accounts.
The paper further examines the potential impacts of active accounts on market liquidity and volatility. It suggests that the concentration of one-directional positions on the EU CCP, combined with the end of the Pension Fund exemption, could widen the basis between LCH-EUREX and result in higher bid-ask spreads and increased liquidity risk for EU CCP clients during market stress.