The Dutch Authority for Financial Markets (AFM) and the Dutch Central Bank (DNB) recently published a set of guidelines to support institutions in implementing the amended requirements under the revised European Market Infrastructure Regulation (EMIR 3). As the designated national competent authorities under EMIR for the Netherlands, the two institutions remind relevant entities of the importance of following these requirements, while acknowledging the challenge of doing so when the European Securities and Markets Authority (ESMA) has yet to finalise the regulatory technical standards (RTS).
The guidelines cover four main areas: the active account requirement (AAR), initial margin model validation, clearing activity in non-EU CCPs, and transparency requirements. For each, DNB and AFM have clarified where a light touch will be taken in terms of enforcement, taking into account pending RTS.
Under the AAR for example, financial counterparties (FCs) and non-financial counterparties (NFCs) are expected to “hold an account at an EU established and authorised CCP” and ensure “operational readiness, including legal documentation, IT systems, and internal processes associated with active accounts”.
Because “implementing the active account requirements before the final draft RTS become applicable may lead to double implementation costs for institutions”, AFM and DNB will not “prioritise supervisory or enforcement action” until the RTS have entered into force.
Regarding initial margin (IM) model validation, existing IM models are to remain in use until the relevant RTS are implemented. In the meantime, enforcement of the processing of applications for initial IM model authorisation will likewise not be prioritised.
Similar exemptions have been made for clearing and transparency requirements
