Changes from plenary report to adopted text

Removed- Ensure that the supervisory framework for EU CCPs is sufficient to manage the risks associated with the interconnectedness of the EU financial system and increasing clearing volumes, in particular in respect to cross-border risks, as these risks could be further amplified as EU clearing markets grow.

RemovedExpected result(s) and impact

RemovedSpecify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

RemovedThe proposal aims to strengthen the EU clearing market by improving the attractiveness of EU CCPs, encouraging clearing in EU CCPs and enhancing the assessment and management of cross-border risks.

Removed1.4.3. Indicators of performance

RemovedSpecify the indicators for monitoring progress and achievements.

RemovedFor each specific objective the following performance indicators have been set.

RemovedImprove the attractiveness of EU CCPs:

Removed– Measured by % of contracts cleared by EU clearing participants in EU and third-country CCPs.

Removed– Number of new EU CCP products approved.

Removed– Time taken on average (number of days) to approve new CCP products and validate model changes.

Removed– Number of non-objection procedures completed.

RemovedEncourage clearing in EU CCPs:

Removed– Average amounts on active accounts at EU CCPs.

Removed– Transactions cleared in EU CCPs in different currencies (absolute value and compared to global markets).

Removed– Number of clearing members and clients in EU CCPs.

Removed– Volume of contracts cleared outside EU CCPs by EU actors or for EU-currency denominated contracts.

RemovedEnhancing the assessment of cross-border risks:

Removed– Number of opinions issued by ESMA per year.

Removed– Number of cases where NCAs deviate from ESMA opinions.

Removed– Number of joint supervisory teams established and tasks performed.

Removed– Number of times ESMA coordinated information requests or asked.

Removed1.5. Grounds for the proposal/initiative

Removed1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative

RemovedThe requirements this proposal aims to meet are to have modern and competitive CCPs in the EU that can attract business while at the same time having safe and resilient EU CCPs and enhance the EU’s open strategic autonomy.

RemovedWith the implementation of this proposal including its intended further development in level 2, the requirements are expected – subject to the agreement by the co-legislators – to be absorbed by both the supervisory community as well as the market at the latest by June 2025.

Removed1.5.2. Added value of Union involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this point 'added value of Union involvement' is the value resulting from Union intervention which is additional to the value that would have been otherwise created by Member States alone.

RemovedReasons for action at European level (ex-ante)

RemovedThe EU clearing market is an inseparable part of the EU financial market. As such, EU action should ensure that EU financial market participants do not face too high risks due to the excessive reliance on systemic third-country CCPs where in case of distress, decisions would be taken by third-country authorities prevent the EU from the option to intervene in emergency situations.

RemovedExpected generated Union added value (ex-post)

RemovedThe objectives of EMIR, namely to regulate derivatives transactions, promote financial stability and to make markets more transparent, more standardised, and thus safer, are an essential building block for a successful EU financial internal market, especially regarding the cross – border component. Member States and national supervisors cannot solve on their own or address cross-border risks related to central clearing within the EU or the framework for third-country CCPs.

Removed1.5.3. Lessons learned from similar experiences in the past

RemovedThis proposal takes into account experiences gained with previous versions of EMIR.

RemovedEMIR regulates derivatives transactions, including measures to limit their risks through CCPs. It was adopted in the wake of the 2008/2009 financial crisis to promote financial stability and to make markets more transparent, more standardised, and thus safer. Similar reforms were implemented in most G20 countries. EMIR requires that derivatives transactions are reported to ensure market transparency for regulators and supervisors; and that their risks are appropriately mitigated through centrally clearing at a CCP or exchanging collateral, known as ‘margin’, in bilateral transactions. CCPs and the risks they manage have grown considerably since the adoption of EMIR.

RemovedIn 2017, the Commission published two legislative proposals amending EMIR, both adopted by the co-legislators in 2019. EMIR REFIT recalibrated some of the rules to ensure their proportionality, while ensuring financial stability. Acknowledging the emerging issues related to the increasing concentration of risks in CCPs, in particular third-country CCPs, EMIR 2.2 revised the supervisory framework and set out a process for assessing the systemic nature of third-country CCPs by ESMA in cooperation with the European Systemic Risk Board (ESRB) and the central banks of issue. EMIR was complemented by the CCP Recovery and Resolution Regulation, adopted in 2020, to prepare for the unlikely – though massively impactful - event that an EU CCP faces severe distress. Financial stability is at the core of these pieces of EU legislation. Since 2017, concerns have been repeatedly expressed about the ongoing risks to the EU financial stability arising from the excessive concentration of clearing in some third-country CCPs, notably the potential risks in a stress scenario. Furthermore, high-risk but low-probability events can happen and the EU must be prepared to face them. While EU CCPs have generally proven resilient throughout these developments, experience has shown that the EU clearing ecosystem can be made stronger, to the benefit of financial stability. However, in order to ensure open strategic autonomy the EU needs to safeguard itself against the risks which can arise when EU market participants are excessively reliant on third-country entities, as this can be a source of vulnerabilities.

RemovedThe experiences gained with EMIR as outlined above, are taken into account in the design of the new proposed requirements.

Removed1.5.4. Compatibility with the Multiannual Financial Framework and possible synergies with other appropriate instruments

RemovedThis proposal and its specific requirements are in line with the current arrangements for financial services within the Multiannual Financial Framework (MFF) and aligned with standard practices of putting the EU budget to work and in line with current the Commission services’ practices in planning and budgeting for new proposals.

RemovedIn addition, the objectives of the initiative are consistent with other EU policies and ongoing initiatives that aim to: (i) develop the CMU, and (ii) enhance the efficiency and effectiveness of EU-level supervision, both within and outside the EU.

RemovedFirst, it is consistent with the Commission's ongoing efforts to further develop the Capital Markets Union ('CMU'). The issues addressed by this proposal affect EU financial stability as they obstruct the reduction of excessive exposures to systemic CCPs and constitute a significant impediment to developing an efficient and attractive EU clearing market, a foundation stone for a deep and liquid CMU. The urgency of further developing and integrating EU capital markets was stressed in the Action Plan on CMU of September 2020.

RemovedSecond, it is consistent with the Commission services’ experience with the implementation and enforcement of third-country provisions in EU financial legislation and implements practical experience gained by the Commission services when approaching these tasks in practice.

RemovedThird, it is consistent with the EU open strategic autonomy objective.

Removed1.5.5. Assessment of the different available financing options, including scope for redeployment

RemovedN/A

Removed1.6. Duration and financial impact of the proposal/initiative

Removedlimited duration

Removedin effect from [DD/MM]YYYY to [DD/MM]YYYY

RemovedFinancial impact from YYYY to YYYY for commitment appropriations and from YYYY to YYYY for payment appropriations.

Removedunlimited duration

RemovedImplementation with a start-up period from YYYY to YYYY,

Removedfollowed by full-scale operation.

Removed1.7. Management mode(s) planned

RemovedDirect management by the Commission

Removedby its departments, including by its staff in the Union delegations;

Removedby the executive agencies

RemovedShared management with the Member States

RemovedIndirect management by entrusting budget implementation tasks to:

Removedthird countries or the bodies they have designated;

Removedinternational organisations and their agencies (to be specified);

Removedthe EIB and the European Investment Fund;