Impacts of EMIR review proposal

In the context of the EMIR review proposal, ABBL welcomes the European Commission’s efforts to increase the competitiveness of the European Central Clearing Framework (CCP).
The 3 main impacts of these efforts on ABBL members, hence on professionals in Luxembourg’s banking sector in general, have been identified as follows:
Impact 1: Active Accounts – Financial counterparties will be required to have an active account with an EU CCP and clear at least part of their transactions on derivatives subject to the clearing obligation in this EU CCP. The ESAs will determine the proportion of derivatives to be cleared via active accounts, and the calibration of this activity will be crucial in assessing the economic feasibility and benefits to counterparties.
Impact 2: Reporting Requirement – Clearing members and clients established in the EU or part of a group subject to consolidated supervision in the EU and clearing in a recognized third country CCP will be required to report to their national competent authority on the scope of their clearing activity in such CCP. The ESAs will develop regulatory technical standards for this reporting, and financial counterparties will need to assess and implement the reporting requirements and the expansion of the scope of data to be captured, which may increase costs.
Impact 3: Capital Requirements Directive – Amendments to the CRD have been proposed to monitor banks‘ concentration risks towards third country CCPs, empowering competent authorities to require the reduction of banks‘ exposures towards such CCPs. This topic is addressed in the Working Group „Market Infrastructures“ and related to the Financial Markets and Intermediation Committee (FMIC). Anyone seeking further information on the subject or who would like to join the working group can reach out to Marilyn Rinck, Financial Markets Adviser at the ABBL via e-mail:
marilyn.rinck@abbl.lu