The European Commission’s EMIR 3.0 proposal has the industry caught in heated debate over the course of this year. Now, members of the European Parliament’s Committee on Economic and Monetary Affairs (ECON) have chimed in with suggested amendments to the proposal – numbering 538, according to an article by Regulation Tomorrow. The requirement for market participants to hold an “active account” at an EU-based clearing house remains a controversial one – and a resolution is yet to be found.
The active account debate
Danuta Huebner from the European People’s Party spoke out against the introduction of quantitative thresholds for the active account requirement, based on her opinion that these were “arbitrary”. Regulation Tomorrow reported that she showed her support for the phased approach, which would require counterparties to “exchange initial and variation margin with CCPs established in the EU and regularly enter into new positions with these CCPs” as part of a first phase. A quantitative threshold would be introduced as a second phase, after review by the European Securities and Markets Authority (ESMA) and only if necessary.
Social democrat Aurore Lalucq expressed support for introducing a quantitative threshold, but not for Danuta Huebner’s suggestion of a phased approach. Claude Gruffat of The Greens was likewise in favour of the quantitative threshold, and wanted to add penalties for counterparties that breach the threshold.
European Conservatives and Reformists member Dorien Rookmaker was not in favour of an active account requirement at all, stating her belief that it would “prevent the EU clearing market from becoming more competitive vis-à-vis third countries”.
More rules and transparency
One aspect of the proposal that all the above mentioned debate participants seemed able to agree on was the centralised supervision of CCPs at EU level by making ESMA the sole supervisor for EU CCPs. Other issues debated include the introduction of more streamlined rules on the approval of new products and services offered by EU CCPs, as well as more clarity on the margin models supplied by EU CCPs.