Trade Associations Call for Deletion of Active Account Proposal

Several prominent trade associations – including EFAMA, BFPI Ireland, EACB, FIA EPTA, Federation of the Dutch Pension Funds, Finance Denmark, Nordic Securities Association, AIMA, ICI Global, FIA, and ISDA – have collectively advocated for the removal of the proposed AAR.
These trade associations have on the one hand voiced their support for measures aimed at enhancing the attractiveness of EU clearing and capital markets, particularly those proposed in EMIR 3.0. These measures include simplifying procedures for CCPs to launch products and modify models, altering collateral and participation requirements, and eliminating the need for an equivalence decision for intragroup transaction exemptions.
Their primary focus is on streamlining the supervisory framework for EU CCPs across member states while making EU CCP offerings more appealing and innovative. They believe these measures will facilitate the sustainable growth of EU CCPs, maintain competitive and open markets, and prioritize EU financial stability and client choice. Indeed, the Group-of-20 reforms to derivatives markets, implemented through EMIR, have improved safety.
However, the proposed AAR is on the other hand deemed detrimental to EU capital markets, introducing fragmentation and reducing netting benefits without enhancing financial stability.
The AAR could also disadvantage EU firms compared to third-country counterparts and result in significant price disparities between CCPs, increasing costs and risks for EU clients. It would ultimately harm European pension savers and investors.
The associations emphasize that EMIR 2.2 already provides effective tools for supervising third-country CCPs and that EMIR 3.0 should further enhance cooperation with third-country authorities, especially in areas such as recovery and resolution planning.
They argue against imposing a location requirement for market participants, highlighting that central clearing markets are inherently global, and shared oversight frameworks are more effective in managing financial stability risks.
The proposed AAR is criticized for compromising the principle of best execution for EU clients, forcing them to accept uncompetitive prices. Policymakers are urged to conduct comprehensive cost-benefit assessments, taking into account the impacts on financial stability and the competitiveness of EU market participants, as well as the balance of hedging interests.