FIA has responded to ESMA’s consultation paper on draft technical standards, which provide further details for the new EMIR 3.0 clearing thresholds regime.
FIA agrees with ESMA's proposal to set aggregate thresholds only for asset classes currently under the clearing obligation, specifically interest rate derivatives and credit derivatives, and supports maintaining the current thresholds for IRDs and credit derivatives.
However, FIA members express concern regarding the timing for market participants to make necessary calculations against these new thresholds, noting a lack of clarity in the proposed regulations.
FIA suggests that different implementation timeframes should be established for financial counterparties and non-financial counterparties. Financial counterparties will face a more complex compliance burden as they must calculate against two sets of thresholds, requiring a sufficient transitional period for compliance. In contrast, non-financial counterparties may benefit from the immediate implementation of the new methodology, given their simpler threshold monitoring.
FIA broadly agrees with the proposed uncleared thresholds but raises concerns about the reductions for IRDs and commodity derivatives. FIA recommends that the current €3 billion threshold for IRDs should be maintained due to inflationary pressures and increased nominal cash flows in the market.
For commodity derivatives, FIA highlights significant inflation since 2012, advocating for an increase in the minimum threshold to €4 billion to maintain competitiveness with other jurisdictions.
FIA recommends maintaining the existing €3 billion threshold for the Active Account Requirement, arguing that reducing it alongside proposed uncleared thresholds would create additional compliance challenges.
FIA supports ESMA's decision not to introduce separate thresholds for various commodity derivatives sub-asset classes, citing operational complexities and the need for an aggregated approach. FIA agrees with the proposal to have a combined bucket for commodity and emission allowance derivatives but stresses the importance of maintaining or increasing the current thresholds for these categories to enhance market liquidity.
Finally, FIA concurs with ESMA's stance against introducing more granular thresholds based on ESG factors or crypto-related features, arguing that such measures could deter innovation and complicate compliance for market participants.
See the response in full in resources, on the right.
