The European Securities and Markets Authority (ESMA) launched two consultation papers addressing key regulatory changes under the European Market Infrastructure Regulation (EMIR) on 7 February. The consultations focus on authorisation requirements for central counterparties (CCPs) and the validation of risk models—both critical areas for post-trade participants.
The first consultation paper outlines four draft Regulatory Technical Standards (RTS) that ESMA must develop under various provisions of EMIR, as amended by Regulation (EU) No 2024/2987. These RTS clarify the documentation required for CCPs seeking authorisation or extending their existing permissions. Additionally, they define the conditions for an accelerated approval process and the procedure for ESMA and supervisory colleges to assess eligibility. The consultation also examines whether certain expansions of services or activities could qualify for exemption from authorisation requirements.
Stricter oversight
The second consultation paper tackles model validation procedures under Article 49 of EMIR. It aims to standardise how changes to risk models and parameters should be assessed, particularly in determining what constitutes a significant modification. The draft RTS also establish criteria for evaluating whether existing model approvals cover specific changes, potentially exempting them from further validation. Additionally, ESMA proposes a structured list of required documents for CCPs seeking approval for model changes.
Next steps for stakeholders
Industry participants have until 7 April 2025 to submit feedback on both consultations. ESMA will review the responses in the second quarter of 2025 and expects to finalise its reports and submit the draft RTS to the European Commission for endorsement by the third quarter.
