Regulatory reporting is complex. With the numerous EMIR updates released by ESMA over the years, it can get quite confusing. The European Commission published a proposal for what is now known as EMIR 3, which was subsequently adopted and has been in force since December 2024 — though certain provisions remain subject to the finalisation of supporting regulatory technical standards and are not yet fully applicable. This update might sound like a major overhaul, however it is unrelated to the EMIR Refit changes which came into effect in April 2024 and affected derivatives trade reporting. It is also worth noting that EMIR 3 applies under the EU regulatory regime only and does not extend to the UK, which operates its own separate post-Brexit framework.
EMIR 3 is primarily aimed at improving the central clearing system in the EU, making EU CCPs more efficient and attractive to market participants. The key points to note are:
- Active Account Requirements (Article 7a)
- Revised Clearing Threshold Calculation
It became apparent to the European Commission, based on an ESMA report, that market participants tend to be more reliant on third-country CCPs to clear their derivatives outside the EU. The excessive reliance of EU financial markets on UK-based CCPs was seen as a source of potential financial instability for the EU. EMIR 3 therefore encourages market participants that clear derivatives to use an EU CCP.
Active Account Requirement (Article 7a)
EMIR 3 introduces a requirement — known as the Active Account Requirement (AAR) — for certain EU counterparties subject to clearing obligations to hold and maintain active accounts with EU-authorised CCPs and to clear a representative number of trades through those accounts. It is important to note that the final text was considerably diluted from earlier proposals: only the largest EU counterparties are in scope, and the minimum representativeness obligation requires clearing an average of at least five trades per year per relevant subcategory of in-scope derivative contracts. The AAR became applicable in June 2025. The RTS detailing its operational and representativeness conditions were published in the Official Journal of the EU and entered into force in February 2026. In-scope counterparties are required to make their first compliance report by July 2026, covering activity from June 2025 onwards.
Revised Clearing Threshold Calculation
EMIR 3 introduces a significant change to how clearing thresholds are calculated. Rather than the previous distinction between exchange-traded derivatives (ETDs) and OTC derivatives, the revised methodology focuses on whether derivatives are cleared or uncleared:
- Non-Financial Counterparties (NFCs): only uncleared OTC derivatives need to be included in the threshold calculation. Derivatives voluntarily cleared through an EU-authorised CCP (under Article 14) or a recognised non-EU CCP (under [Article 25) may be excluded.
- Financial Counterparties (FCs): must calculate both their uncleared OTC positions and their aggregate OTC exposure (cleared and uncleared combined).
These clearing threshold provisions are not yet in force. ESMA published its final draft RTS on the revised clearing thresholds on 25 February 2026 and submitted them to the European Commission for endorsement. Once adopted by the Commission, the RTS will be subject to a non-objection period by the European Parliament and the Council of the EU before being published in the Official Journal and entering into force. Until that point, the existing clearing threshold calculation methodology continues to apply.
Background
In the past, ESMA released amendments to European Market Infrastructure Regulations (EMIR), known as EMIR 2.2. The main change introduced under EMIR 2.2 was a new tiering system for third-country Central Counterparties (CCPs).
Further Information
For the latest guidance on EMIR 3, including questions on the Active Account Requirement please contact us.
