EMIR 3.0: A New Era for Clearing—What Market Participants Must Do Now

Why EMIR 3.0 Matters

EMIR 3.0 is the EU’s regulatory answer to concerns about financial stability, market fragmentation, and the risks of over-reliance on non-EU clearing houses for euro and PLN-denominated derivatives. The new rules require active, operational, and representative accounts at EU CCPs, robust stress-testing, and enhanced reporting. The aim: to ensure the EU financial system is resilient, competitive, and less exposed to external shocks. The Active Account Requirement (AAR) is designed to:

•  Anchor a critical mass of euro clearing within the EU,
• Enhance the EU’s supervisory grip on systemic risk,
• Foster competition and innovation among EU CCPs.

The ESMA Final Report on EMIR 3.0 AAR refines and clarifies many operational, reporting, and threshold-related requirements in response to industry feedback, with the greatest impact on how banks, asset managers, and CCPs prepare for compliance and support their clients. Non-EU CCPs are indirectly affected as EU clients adapt to the new landscape.

The ESMA Final Report on EMIR 3.0 AAR is more precise, flexible, and tailored than the consultation version, reflecting substantial feedback from market participants and focusing regulatory burden where it is most needed. The final version introduces more granular requirements for trade types, sizes, and maturities, making compliance more tailored but also potentially more complex. Euro CDS are now excluded due to ICEU ceasing clearing. Only products with EU CCP clearing are in scope, providing more certainty for market participants. The final report clarifies that thresholds are calculated at the group level, but obligations apply at the entity level—addressing industry concerns about regulatory arbitrage.

EMIR 3.0 – Impact Transcends EU and non-EU Entities

EMIR 3.0 introduces significant implications for banks, broker-dealers, CCPs, asset managers, and hedge funds—regardless of whether they are EU or non-EU entities. Large EU banks with substantial exposures to euro and PLN OTC interest rate derivatives are required to maintain active, operational accounts at EU CCPs. This may necessitate splitting positions between EU and non-EU CCPs, thereby increasing operational complexity and potentially reducing netting efficiency. As a result, banks must invest in systems, processes, and staff to support dual-clearing infrastructures, including enhanced stress testing and reporting obligations.

Non-EU banks with EU subsidiaries or branches may also be subject to the active account requirement (AAR) if their exposures exceed specified thresholds. Some may need to establish or expand EU CCP memberships, incurring additional onboarding and operational costs. Moreover, non-EU banks may be required to offer clients a choice between EU and non-EU CCP clearing, which could influence product offerings and pricing strategies.

EMIR 3.0 – Impact on EU and Non-EU CCPs and Recommended No-Regret Actions

EU CCPs are well-positioned to gain market share but must invest in operational excellence, product innovation, and client service.

Impact on EU CCPs (e.g., Eurex, LCH SA, Euronext)

A. Business Growth and Market Share

• Increased Clearing Volumes: EU CCPs are set to gain significant new business as EU and some non-EU counterparties must clear a representative volume of eligible derivatives through EU CCPs.
• Client Onboarding: Expect a surge in new memberships and onboarding activity, especially from firms previously focused on non-EU CCPs.

B. Operational and Capacity Demands

• Threefold Capacity Readiness: EU CCPs must certify that client accounts can withstand a threefold increase in clearing activity, requiring robust stress-testing and operational resilience.
• System Upgrades: Enhanced IT, risk management, and reporting systems will be necessary to handle increased volumes and meet regulatory standards.

C. Product and Liquidity Development

• Product Suite Expansion: To attract and retain new business, EU CCPs may need to further expand their product offerings, particularly in less liquid or specialized derivatives.
• Liquidity Incentives: EU CCPs may introduce fee reductions, incentives, or liquidity schemes to deepen order books and attract market makers.

D. Regulatory and Reporting Responsibilities

• Enhanced Reporting: EU CCPs must provide written certifications of account capacity and contribute to clients’ regulatory reporting.
• Ongoing Engagement: Continuous dialogue with ESMA, NCAs, and clients will be necessary to ensure compliance and adapt to evolving requirements.

Recommended Actions for EU CCPs (Euronext, LCH SA, Eurex)

A. Infrastructure & Capacity Assessment

• Model a Threefold Volume Increase:
  Simulate a scenario where each active account’s outstanding positions and new trades triple in a short period.
• Stress-Test All Relevant Systems:
  Test clearing, risk, collateral, settlement, and reporting systems for resilience under this load.

B. Technical and Functional Testing

• Conduct Annual (or More Frequent) Stress Tests:
  • Include both technical (system performance, latency, failover) and functional (operational workflows, margin calls, risk calculations) aspects.
  • Document all test scenarios, results, and remediation actions.
• Test End-to-End Processes:
  Ensure all upstream (trade capture) and downstream (settlement, reporting) processes can handle the surge.

C. Certification & Documentation

• Issue Written Statements:
  After successful stress-testing, provide each clearing participant with a written certification that their account can support a threefold increase in activity.
• Maintain Detailed Records:
  Keep comprehensive records of test plans, outcomes, and certifications for regulatory review.

D. Staffing & Governance

• Appoint Dedicated Staff:
  Assign responsibility for stress-testing, certification, and ongoing monitoring to a named team or individual.
• Board Oversight:
  Ensure senior management and the board are informed and approve the stress-testing framework.

E. Continuous Improvement

• Remediate Weaknesses Promptly:
  Address any system or process weaknesses identified during stress-testing.
• Feedback Loop:
  Use lessons learned to refine stress-testing scenarios and operational procedures.

Impact on Non-EU CCPs (LCH Ltd, ICE Clear Europe, CME)

Non-EU CCPs face headwinds in retaining EU business and must adapt through innovation, partnerships, and regulatory engagement.

A. Potential Loss of EU-Originated Business

• Volume Migration: Non-EU CCPs, especially those clearing euro and PLN interest rate derivatives, risk losing a portion of EU-originated business as clients shift trades to comply with the AAR.
• Client Relationship Management: Non-EU CCPs will need to work harder to retain EU clients and may see increased demand for cross-margining and interoperability solutions.

B. Regulatory Scrutiny and Tier 2 Status

• Ongoing Oversight: Tier 2 CCPs (systemically important to the EU) face continued ESMA scrutiny and could be subject to further restrictions if deemed necessary for EU financial stability.
• Reporting and Transparency: Non-EU CCPs must ensure transparency and data sharing with EU authorities to maintain equivalence and access.

C. Operational Adjustments

• Service Adaptation: Non-EU CCPs may need to adapt their service models, possibly developing new products or partnerships to remain competitive for EU clients.
• Cost Management: Potential loss of netting efficiencies and increased operational costs for clients may require pricing adjustments or new value-added services.

Recommended Actions for Non-EU CCPs (LCH Ltd (UK), ICE, CME)

A. EU Client Support

• Support EU Clients’ Compliance: While not directly subject to EU AAR, non-EU CCPs should help EU clients with data and stress-testing evidence for their own regulatory reporting.

B. Voluntary Alignment (Best Practice)

• Consider Voluntary Stress-Testing: Adopt similar stress-testing standards for EU client accounts to maintain competitiveness and demonstrate robust risk management.
• Provide Data Transparency: Offer clients detailed data on account capacities and stress-test outcomes.

C. Regulatory Engagement

• Liaise with ESMA and National Authorities: Stay updated on evolving requirements and ensure readiness for any future equivalence or Tier 2 CCP obligations.

D. Operational Readiness

• Review Internal Stress-Testing Frameworks: Ensure existing stress-testing programs are robust, well-documented, and can be mapped to EU standards if required.
• Scenario Analysis: Include scenarios relevant to a sudden migration of EU-originated business or changes in clearing flows.

All CCPs must prioritize compliance, transparency, and client-centric strategies to thrive in the evolving regulatory landscape. It is highly recommended that all CCP’s must engage with clearing members and proactively communicate stress-testing schedules, results and any system outages. The CCP’s must prepare to submit stress-testing results and certifications to authorities as part of annual reporting. In line with the evolving regulatory expectations, CCP’s must consider including cyber, operational and market stress scenarios.

EMIR 3.0 Strategic Implications for EU and Global Firms

Firms that invest early in EU CCP access, optimize their structures, and leverage exemptions will gain a competitive edge. Those slow to adapt may face higher costs, lost business, and pressure to consolidate or exit certain markets.

1. Boost for EU CCPs—Market Share and Innovation

Impact:

• EU-based CCPs (like Eurex and LCH SA) will see a significant increase in clearing volumes as EU and some non-EU participants are required to maintain active, operational accounts and clear a representative volume of trades.
• These CCPs may invest further in product innovation, liquidity incentives, and client onboarding to capture new business and differentiate themselves from non-EU CCPs.

Competitive Outcome:

• EU CCPs gain market share and pricing power in euro and PLN interest rate derivatives.
• Non-EU CCPs (e.g., LCH Ltd in London, ICE Clear Europe) risk losing some EU-originated business and must adapt by enhancing cross-border services or lobbying for equivalence.

2. Operational and Cost Pressures—Advantage for Larger, Well-Resourced Firms

Impact:

• Maintaining dual clearing infrastructures (EU and non-EU CCPs), stress-testing, and enhanced reporting will raise fixed costs.
• Larger banks and asset managers with established EU clearing setups will find it easier to absorb these costs and comply efficiently.

Competitive Outcome:

• Large, diversified firms (both banks and asset managers) are advantaged—they can spread costs, invest in technology, and optimize clearing strategies.
• Smaller firms and new entrants may face barriers due to higher compliance and operational costs, potentially leading to market consolidation.

3. Portfolio Fragmentation—Reduced Netting, Higher Margins

Impact:

• Splitting portfolios between EU and non-EU CCPs reduces netting efficiency, leading to higher margin requirements and collateral costs.
• Firms with sophisticated collateral management and optimization capabilities will be better positioned.

Competitive Outcome:

• Firms with advanced risk and collateral management capabilities gain a competitive edge.
• Some hedge funds and asset managers may be incentivized to restructure funds or trade flows to remain below thresholds and avoid fragmentation.

4. Strategic Use of Exemptions—Regulatory Arbitrage Opportunities

Impact:

• The ability to structure portfolios, funds, or group entities to remain below exemption thresholds creates a competitive lever.
• Firms that can optimize their structures and exposures will minimize compliance costs and retain flexibility in clearing venue choice.

Competitive Outcome:

• Sophisticated asset managers and hedge funds can use exemptions as a strategic tool to maintain performance and client appeal.
• Less agile firms may find themselves at a disadvantage, forced into higher-cost compliance.

5. Market Liquidity and Pricing Dynamics

Impact:

• Liquidity may fragment between EU and non-EU CCPs, potentially widening bid-offer spreads and reducing depth in some products.
• EU CCPs may need to offer incentives or fee reductions to attract and retain liquidity.

Competitive Outcome:

• Liquidity providers and market makers with strong EU CCP access will benefit from early-mover advantages.
• Some products may become more expensive or less accessible for firms unable to efficiently access both EU and non-EU CCPs.

6. Global vs. Regional Players—Shifts in Client Relationships

Impact:

• Non-EU banks and asset managers with EU subsidiaries must decide whether to build up EU CCP capabilities or risk losing EU clients.
• EU clients may prefer counterparties with robust EU CCP access for operational and regulatory certainty.

Competitive Outcome:

• Global firms with flexible, multi-jurisdictional clearing setups will be best placed to serve both EU and non-EU clients.
• Regional players may need to partner or invest to remain competitive.

EMIR 3.0 Timelines – Preparations Should Begin NOW

Firms and CCPs should not wait for the final RTS application date to begin preparations. System upgrades, onboarding, and compliance planning should be underway to ensure a smooth transition when the rules become effective. The single most important date is the RTS application date (late 2025 or early 2026), when all operational, stress-testing, and reporting obligations become enforceable. Annual obligations (stress-testing, reporting) are recurring and start from the RTS application date. Threshold and exemption monitoring is a continuous process beginning at the RTS application date.

• Immediate focus: Prepare for compliance by late 2025/early 2026—this is when most obligations become enforceable.
• Annual obligations: Stress-testing and reporting are recurring, with the first cycle due upon the RTS application date.
• Continuous monitoring: Thresholds for exemptions and representativeness must be tracked on an ongoing basis.

How can Onepoint help you?

To discuss a tailored EMIR 3.0 compliance plan or request a demo of Onepoint’s technology solutions, contact Michel Jaubert, Hugues Bessière or Kishore Ramakrishnan today.

1. Regulatory Advisory Services

For All Client Types

• Impact Assessment: Analyse how EMIR 3.0 and the Active Account Requirement (AAR) affect each client’s business, operations, and compliance obligations.
• Gap Analysis: Identify current gaps in operational, reporting, and risk management frameworks relative to EMIR 3.0 requirements.
• Strategy & Roadmap: Develop tailored compliance roadmaps, including timelines, resource allocation, and implementation milestones.
• Threshold & Exemption Optimization: Advise on structuring portfolios, entities, and trading activities to optimize the use of exemptions and minimize compliance costs.
• Regulatory Interpretation: Provide ongoing interpretation of evolving RTS and regulatory guidance, ensuring clients stay ahead of new obligations.

2. Technology Solutions

For All Client Types

• Reporting Automation: Build or integrate systems to automate the capture, aggregation, and submission of required regulatory reports (activities, exposures, operational readiness, representativeness).
• Threshold Monitoring Tools: Implement real-time dashboards and alerts for monitoring clearing thresholds, representativeness, and exemption statuses.
• Stress-Testing Platforms: Deploy simulation tools for annual and ad-hoc stress-testing of operational capacity, as required by EMIR 3.0.
• Workflow Digitization: Digitize and streamline onboarding, certification, and documentation processes, including CCP capacity certifications and audit trails.
• Data Integration: Integrate data from multiple trading, clearing, and risk systems to support consolidated EMIR 3.0 compliance.

3. Client-Specific Services

A. For CCPs (e.g., Euronext, LCH, Eurex, ICE, CME)

• Capacity Certification Support: Develop frameworks and documentation for certifying account capacity to withstand a threefold surge in activity.
• Stress-Testing Automation: Implement or enhance stress-testing platforms for both technical and functional requirements.
• Client Onboarding & Support: Streamline onboarding processes for new clearing members and automate the generation of required regulatory certifications.
• Regulatory Reporting Solutions: Build or enhance systems for producing and submitting required reports to authorities and clients.

B. For Banks & Broker-Dealers

• Dual-Clearing Infrastructure: Advise on and implement systems to support simultaneous clearing at EU and non-EU CCPs, optimizing for netting and collateral efficiency.
• Operational Readiness Assessment: Assess and upgrade operational workflows, staffing, and IT systems to meet EMIR 3.0’s operational conditions.
• Margin & Collateral Optimization: Deploy tools to optimize collateral usage and margin requirements in a fragmented clearing environment.

C. For Asset Managers & Hedge Funds

• Portfolio Structuring for Exemptions: Advise on fund/entity structuring and trade allocation to remain below clearing or representativeness thresholds where beneficial.
• Trade Compression & Netting Solutions: Implement solutions for regular portfolio compression to manage exposures and thresholds.
• Client/Investor Communication: Provide templates and support for communicating regulatory-driven clearing changes to investors and stakeholders.

4. Change Management & Training

• Stakeholder Workshops: Run training sessions for compliance, operations, and trading teams on EMIR 3.0 requirements and best practices.
• Change Management Programs: Support the transition to new processes and systems, ensuring minimal disruption and high adoption rates.

5. Ongoing Regulatory Monitoring & Support

• Regulatory Watch: Provide ongoing updates and alerts on changes to EMIR 3.0, RTS, and related EU/UK regulations.
• Remediation and Audit Support: Assist with regulatory audits, remediation of findings, and preparation for future regulatory reviews.

Why Choose Onepoint?

• Deep Regulatory Expertise: In-depth knowledge of EMIR 3.0, RTS, and the European clearing landscape.
• End-to-End Solutions: Advisory and technology services tailored to each client’s regulatory, operational, and strategic needs.
• Proven Track Record: Experience supporting leading financial institutions through major regulatory transitions.