EMIR 3: ESMA revises draft active account technical standards

1. Key points

• On 19 June 2025, ESMA submitted to the European Commission its final report and revised technical standards under Article 7a of EU EMIR, incorporating market feedback on the draft first published in November 2024.
• The technical standards build on the framework of the new active account requirement (AAR) introduced by EMIR 3¹ , setting out how in-scope market participants must comply with the AAR and related rules.
• Most of the changes focus on the new reporting requirements, which were introduced to help ESMA monitor AAR compliance. Notably, the number of AAR reporting fields has been significantly reduced to align more closely with existing EU EMIR reporting obligations.
• ESMA has also streamlined the operational conditions that in-scope entities must meet to demonstrate that their EU CCP accounts are functional and able to receive large volumes of in-scope transactions at short notice.
• However, changes to the representativeness requirement are limited to a minor reduction in scope to alter the maturity ranges for euro-denominated short-term interest rate derivatives and remove euro-denominated short-term interest rate options.
• The revised technical standards contain several typographical errors and incorrect cross-references, but these are expected to be corrected in the final stages of the adoption process.
• The European Commission now has three months to decide whether to adopt the revised technical standards, after which they will be reviewed by the European Parliament and the Council.
• The AAR itself has applied since 25 June 2025. Since then, market participants have been complying with the rules in their draft form, recognising that they may need to adjust certain procedures if further changes are made during the adoption process.

2. Key changes

Changes to operational conditions

Under Article 7a(3), in-scope entities must comply with various conditions to demonstrate that their EU accounts are permanently functional and able to process significant volumes of in-scope transactions at short notice.

Market feedback suggested that some of the originally proposed conditions were unnecessary, given the CCP onboarding processes that market participants would already have undergone. In light of this, ESMA has amended the technical standards so that compliance with some of these requirements can be achieved simply through participation in an EU CCP, allowing firms to comply with Article 7a(3) without having to meet further operational or documentation requirements.

Notably, some of the more controversial elements have been replaced. For example, a requirement for firms to appoint a dedicated staff member to monitor clearing arrangements has been replaced with a requirement for "necessary human resources" to be in place. Similarly, the obligation for firms to establish cash and collateral accounts with "sufficient financial resources" to meet their clearing obligations has been replaced with a requirement for CCP contractual arrangements to include arrangements relating to cash and collateral accounts (which would be expected to be the case in any event).

The requirement to obtain CCP certification as to operational clearing capacity remains, but ESMA notes in the final report that (i) this can be provided electronically and (ii) certification can be made publicly or to all relevant counterparties at once. This appears to put the onus more on the CCP than in-scope firms (a key ask from market participants), but the legal requirement nonetheless remains on the in-scope entity rather than the CCP.

Stress testing

The account stress testing requirements have also been simplified and the test frequency has been reduced to annually.

Changes to the representativeness requirement - classes

EMIR 3 specifies the broad categories of transaction that are in scope of the AAR. These are:

• OTC euro-denominated interest rate derivatives;
• OTC Polish zloty-denominated interest rate derivatives; and
• euro-denominated short-term interest rate derivatives.

The technical standards build on these broad categories by sub-dividing them further, into sub-groups based on (i) classes of in-scope transaction and (ii) sub-categories of class.

In its final report, ESMA has kept the recommended classes for OTC euro-denominated interest rate derivatives and OTC Polish zloty-denominated interest rate derivatives the same² , but has narrowed the application of the representativeness requirement to euro-denominated short-term interest rate futures only, excluding options.

Changes to the representativeness requirement – sub-categories

ESMA has suggested only one minor change to the sub-categories, increasing the longest maturity range for euro-denominated short-term interest rate derivatives from 12-18 months to 12-24 months.

Changes to the reporting requirements

The AAR reporting framework is divided into three discrete sections:

1. reporting of activities and risk exposure;
2. reporting of compliance with the operational requirement; and
3. reporting of compliance with the representativeness requirement.

Consultation feedback overwhelmingly indicated that the original proposals were too onerous, duplicative, and went beyond what is necessary for ESMA to effectively monitor AAR compliance.

Reporting of activities and risk exposure

In particular, feedback suggested that the proposed reporting of margin and collateral information was beyond the scope of EMIR 3 and served little purpose, noting also that margining can be undertaken across broad netting sets, including out of scope contracts.

As a result, the number of fields in the AAR compliance reporting template has been reduced. Many of the originally proposed reporting fields have been removed, including those relating to posted margin and whether transactions are cleared.

The resulting template is much more closely aligned with existing reporting requirements under Article 9 of EU EMIR, which should help to ease the reporting burden.

Reporting of compliance with the operational requirement

Similarly, the obligation to report on compliance with the operational conditions discussed above has also been pared back. Under the revised standards, all that is needed to evidence compliance with the EU CCP operational criteria is a six-monthly statement of compliance, with evidence of compliance to be available on request.

Reporting of compliance with the representativeness requirement

Reporting on compliance with the representativeness requirement has been amended to:

1. remove the requirement to report gross and net notional amounts of cleared transactions, and report only the number of cleared transactions; and
2. remove the requirement to report Unique Trade Identifiers.

ESMA also clarifies that the reference period for EU CCPs should be the period immediately preceding the report date and the reference period for non-EU CCPs should be the period immediately preceding that used for EU CCPs.

Additional supervisory costs

In the consultation, ESMA notes that scaling back these reporting fields will increase its supervisory costs and those of competent authorities, as additional resources will be needed to process data that has already been reported under other EMIR requirements.

Nevertheless, market participants will welcome the substantial reduction in reporting obligations.

Report timing

ESMA has retained the specification that reports be made by the last day of January and July each year, using data from the previous twelve months. There is an initial six-month grace period from entry into force of the rules to allow firms time to prepare, and the first report should include all data for the period from entry into force and application of the requirement.

Commentary

There is good and bad here; market participants will welcome the (much-publicised) streamlining of AAR reporting, and should now find it easier to leverage existing reports under Article 9. It is also helpful that participation in an EU CCP will be sufficient to evidence many of the operational requirements. On the other hand, many market participants will be disappointed that the representativeness requirement has not been scaled back in any meaningful way.

Overall, what market participants really need is certainty and detail as to the requirements, and will therefore be hoping that the technical standards are finalised sooner rather than later.