The futures industry association (FIA) as well as the international swap dealers association (ISDA) have published their concerns about the added burden and impact on competitiveness these proposed changes would have.
The European Securities and Markets Authority (ESMA) has introduced the active account requirement (AAR) under the revised European Market Infrastructure Regulation (EMIR) 3.0, aiming to enhance financial stability by reducing EU counterparties’ reliance on systemically important third-country central counterparties (CCPs). The AAR mandates that certain financial and non-financial counterparties maintain operational and representative active accounts with EU-authorized CCPs. ESMA’s consultation paper detailing the AAR was published on the 20th of November 2024 with the consultation period concluding on the 27th of January 2025. EMIR 3.0 entered into force on the 24th of December 2024, and the AAR is set to become effective on the 24th of June 2025.
Read more: https://www.fi-desk.com/eurex-emir-3-0-are-you-ready/
In response, on the 27th of January 2025, ISDA highlighted significant issues with the proposed reporting regime, stating “We have very significant concerns with the proposed reporting requirements”. For ISDA, it exceeds what is necessary to monitor compliance and is inconsistent with the EU’s commitment to reducing administrative and reporting burdens. ISDA also pointed out ambiguities in the operational requirements, particularly concerning stress-testing.
Similarly, the FIA, in its response on the same day said: “We strongly disagree with the proposed reporting requirements, including the requirement to report margin and UTIs”. The association argued that these proposals contradict the European Commission’s objectives of reducing the reporting burden and ensuring EU firms’ competitiveness.
In addition to expressing concerns, ISDA and FIA have put forward specific recommendations to address the issues identified with the AAR. ISDA recommends that ESMA conduct a comprehensive cost-benefit analysis before implementing the AAR to assess its potential impact on market participants. They also suggest that ESMA provide clear guidance on the operational conditions, particularly stress-testing procedures, to ensure consistent application across the industry.
Similarly, the FIA advises that ESMA consider alternative approaches to the AAR that align with the European Union’s objectives of reducing administrative burdens and enhancing competitiveness. The FIA also recommends that ESMA engage in ongoing dialogue with industry stakeholders to develop a reporting regime that is practical and effective for monitoring compliance.
Both associations also put forward comprehensive recommendations to reduce unnecessary complexity and preserve EU market competitiveness. In its submission, ISDA emphasized the need for clearer threshold calculations, clarified operational capacity definitions, and more targeted reporting, advising against redundant data submissions (such as UTIs and margin figures) already captured under EMIR. FIA similarly called for limiting the scope to cleared derivatives, simplifying stress-testing requirements, and aligning the reporting process more closely with the existing Article 9 EMIR data. Both ISDA and FIA underscored that these refinements would maintain the AAR’s risk mitigation goals while avoiding excessive administrative burdens.
Sources :
https://www.fia.org/sites/default/files/2025-01/ESMA_AAR_FIA%20Response.pdf
https://www.isda.org/a/FDrgE/Final-response-ESMA-consultation-on-AAR-012725.pdf
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