This regulation amends several EU regulations related to central counterparties (CCPs) and derivatives clearing. The key aspects include:1. The regulation aims to reduce excessive exposures to third-country CCPs and improve the efficiency of EU clearing markets. It introduces new requirements for financial counterparties to maintain active accounts at EU CCPs and clear a representative portion of certain derivatives through them.2. Major changes include:
- New requirements for financial counterparties to maintain active accounts at EU CCPs for clearing certain derivatives
- Enhanced supervision and monitoring of CCPs through a new Joint Monitoring Mechanism
- Simplified procedures for CCPs to extend services and modify risk models
- New rules on interoperability arrangements between CCPs
- Enhanced transparency requirements for CCPs and clearing members
3. Key provisions that may impact market participants:
- Financial counterparties must hold active accounts at EU CCPs for clearing euro and Polish zloty interest rate derivatives
- New requirements for CCPs to provide transparency on fees and risk models
- Restrictions on CCPs being clearing members of other CCPs
- Enhanced requirements for non-financial counterparties acting as clearing members
- New procedures for validation of CCP risk models and parameters
The regulation will generally apply from December 24, 2024, with some provisions having different application dates. It represents a significant reform of the EU’s derivatives clearing framework aimed at reducing reliance on third-country CCPs while improving the competitiveness of EU CCPs.
