The Council of the EU has published the amendment of three directives – 2009/65/EC, 2013/36/EU, and 2019/2034 – to address “the treatment of concentration risk arising from exposures towards central counterparties (CCPs) and of counterparty risk in centrally cleared derivative transactions”. The intention is to “ensure consistency with the new requirements for clearing” under the European Markets Infrastructure Regulation (EMIR 3.0).
Across the three directives, the amendments cover clarifications of the definition of CCPs, exposures from transactions that are not centrally cleared through authorised CCPs, strategies to mitigate concetration risk, and more.
These changes continue the ongoing debate on “the excessive reliance of the union financial system on systemically important third-country CCPs” and how this reliance could affect financial stability within the bloc. The council encourages institutions and investment firms “to take the necessary steps to adapt their business models” and enhance their risk management practices, taking into account the nature, scope, and complexity of their market activities.
