European Securities and Markets Authority Publishes Discussion Paper on Clearing Thresholds Under European Market Infrastructure Regulation

The European Securities and Markets Authority has published a report and discussion paper seeking feedback on its review of the clearing thresholds under the European Market Infrastructure Regulation. Responses should be submitted by January 19, 2022.

EMIR was amended by the EMIR Refit Regulation, which entered into force in June 2019 and, amongst other things, introduced a requirement for ESMA to periodically review clearing thresholds and update them where necessary. The report provides an overview of the EMIR clearing regime and discusses other areas such as the impact of Brexit on clearing thresholds and the current application of the clearing obligation. Following Brexit, exposures to U.K. clearing houses became treated as uncleared exposures under EMIR, creating unintended consequences for the thresholds. The discussion paper sets out a series of questions for respondents on various aspects of the current clearing regime, including: (i) whether further clarification is required on the types of contracts included in certain calculations; (ii) any issues respondents may wish to raise with the current coverage provided by clearing thresholds; and (iii) whether there are differences in treatment between financial counterparties and non-financial counterparties which might justify different calibration of the clearing thresholds.

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