Regulation 2024/2987 - Amendment of Regulations (EU) No 648/2012, (EU) No 575/2013 and (EU) 2017/1131 as regards measures to mitigate excessive exposures to third-country central counterparties and improve the efficiency of Union clearing markets - Main contents

Official Journal

of the European Union

EN

L series

2024/2987

4.12.2024

Regulation (EU) No 648/2012 of the European Parliament and of the Council (4) contributes to the reduction of systemic risk by increasing the transparency of the over-the-counter (OTC) derivatives market and by reducing the counterparty credit and operational risks associated with OTC derivatives.

Post-trade infrastructures are a fundamental aspect of the capital markets union and are responsible for a range of post-trade processes, including clearing. An efficient and competitive clearing system in the Union is essential for the functioning of Union capital markets and is a cornerstone of the financial stability of the Union. It is therefore necessary to lay down further rules to improve the efficiency of clearing services in the Union in general, and of central counterparties (CCPs) in particular, by streamlining procedures, especially for the provision of additional services or activities and for changing CCPs’ risk models, by increasing liquidity, by encouraging clearing at Union CCPs, by modernising the framework under which CCPs operate, and by providing the necessary flexibility to CCPs and other financial actors to compete within the internal market.

Union market participants need to have more options as regards access to safe and efficient clearing services. To attract business, CCPs must be safe and resilient. Regulation (EU) No 648/2012 lays down measures to increase the transparency of derivatives markets and mitigate risks through clearing and the exchange of margin. In that respect, CCPs play an important role in mitigating financial risks. Rules should therefore be laid down to further enhance the stability of Union CCPs, notably by amending certain aspects of the regulatory framework. In addition, and in recognition of Union CCPs’ role in preserving the financial stability of the Union, it is necessary to strengthen further the supervision of Union CCPs, with particular attention to their role within the broader financial system and the fact that they provide cross-border services.

Central clearing is a global business and Union market participants are active internationally. However, since the adoption of amendments to Regulation (EU) No 648/2012 as regards the procedures and authorities involved for the authorisation of CCPs and requirements for the recognition of third-country CCPs, concerns have been expressed repeatedly, including by the European Supervisory Authority (European Securities and Markets Authority) (ESMA) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council (5), about the ongoing risks to the financial stability of the Union arising from the excessive concentration of clearing in some third-country CCPs, in particular due to the potential risks that can arise in stressed market conditions. In the short term, in order to mitigate the risk of cliff edge effects...