European clearinghouses are pushing back on ESMA’s draft standards for margin transparency under EMIR 3. In a consultation response published this September, industry group EACH warns that the rules could end up duplicating existing disclosures, exposing sensitive know-how, and adding cost without much benefit.
According to EACH, CCPs already hand out a lot of margin information, from simulators and documentation to international PQD reports. Yet usage of these tools is limited, and layering new requirements on top risks making clearing more expensive without helping liquidity preparedness.
The group is particularly worried about ESMA’s detailed disclosure demands. Forcing CCPs to reveal methodologies, parameters or stress-scenario settings could allow outsiders to reverse-engineer their models, undermining competitiveness. Instead, EACH suggests keeping things at a higher level, focusing on clarity and usability rather than technical overload.
Simulations
ESMA’s draft would require CCPs to show all margin add-ons in their simulators, and to run both hypothetical and historical stress scenarios. EACH argues that only material add-ons should be included, and that historical scenarios are enough. Otherwise, the exercise risks becoming complex and costly with little added value.
On implementation, EACH asks for at least 18 months after final rules are set, pointing out that not all CCPs have the same resources. A phased approach could help smaller players keep up without being overburdened.
