EMIR 3: what derivatives traders and CCPs need to do differently
Regulation (EU) 2024/2987 entered into force on 24 December 2024 and introduced the active account requirement, revised clearing thresholds, new exemptions, and expanded reporting obligations. Here is what changed and what in-scope firms must now do.
This article is for informational purposes only and does not constitute legal advice. Consult a qualified legal professional for advice specific to your situation.
What EMIR 3 is and why it was introduced
The European Market Infrastructure Regulation (EMIR), originally adopted in 2012 (CELEX: 32012R0648), established the foundational rules for over-the-counter (OTC) derivatives markets in the EU: mandatory central clearing through central counterparties (CCPs), reporting to trade repositories, and risk mitigation for uncleared trades. It was a direct response to the 2008 financial crisis, which exposed the opacity and systemic risk embedded in bilateral derivatives markets.
EMIR has been revised twice since then. EMIR Refit (2019) reduced the compliance burden for smaller counterparties. EMIR 2.2 (2020) strengthened the supervisory framework for third-country CCPs. The third revision, Regulation (EU) 2024/2987, known as EMIR 3, was published in the Official Journal of the European Union on 4 December 2024 and entered into force on 24 December 2024 (CELEX: 32024R2987).
The trigger for EMIR 3 was Brexit. After the United Kingdom left the EU, London-based CCPs, principally LCH Ltd., became third-country entities under EU law. Despite this, EU counterparties continued to clear large volumes of euro-denominated derivatives through UK infrastructure. ESMA estimated that approximately 80% of euro-denominated interest rate derivatives continued to be cleared outside the EU, primarily through LCH Ltd. EU regulators considered this a financial stability risk, outside their direct supervisory reach and inconsistent with the EU’s stated goal of strategic autonomy in financial markets.
EMIR 3 addresses this through four main areas of change: the active account requirement, revised clearing thresholds and exemptions, streamlined CCP authorisation procedures, and new reporting obligations.
The active account requirement
The central and most consequential change in EMIR 3 is the active account requirement (AAR), introduced under Article 7a of the amended EMIR.
The AAR applies to financial counterparties (FCs) and non-financial counterparties (NFCs) that are subject to the clearing obligation under EMIR and exceed the clearing threshold in either of two categories of derivatives: interest rate derivatives denominated in euro or Polish zloty, or short-term interest rate derivatives (STIR) denominated in euro. Credit default swaps denominated in euro were proposed for inclusion in the original Commission proposal but were excluded from the final regulation following industry pushback.
In-scope counterparties must maintain at least one active account at a CCP established and authorised in the EU or European Economic Area. The account must be permanently operational: legal documentation in place, IT connectivity established, and regular stress testing confirmed. It cannot be a dormant account opened to satisfy the letter of the requirement and then left unused.
The AAR has two components that operate independently.
The operational requirement concerns the establishment and maintenance of the active account itself. In-scope counterparties must notify ESMA and their national competent authority as soon as they become subject to the AAR. Those already in scope at the date EMIR 3 entered into force had until 25 June 2025 to establish their active account. New in-scope counterparties have six months from the date they first exceed the relevant threshold.
The representativeness requirement goes further. It requires that in-scope counterparties clear a representative number of trades through their active EU CCP account, not merely hold one open. The specific thresholds and methodology for determining representativeness were subject to ESMA consultation and detailed in the final RTS on the AAR conditions, submitted to the European Commission in June 2025 and adopted in October 2025.
There is one significant exemption. Counterparties that already clear at least 85% of their in-scope derivative contracts through authorised EU CCPs, calculated on gross notional value, are exempt from both the operational and representativeness conditions. This exemption is calculated at group level for EU-consolidated groups, and intragroup transactions are excluded from the calculation. Third-country entities within a group are included, specifically to prevent firms from restructuring to shift clearing activity out of the EU and into non-EU affiliates.
Counterparties with open positions of at least EUR 6 billion in in-scope categories are additionally required to clear at least five trades per class of derivatives through their active account during the relevant reference period.
Revised clearing thresholds and exemptions
EMIR 3 makes several targeted amendments to the clearing thresholds and exemptions that determine which counterparties are subject to the clearing obligation in the first place.
The definition of OTC derivatives has been amended. Previously, a derivative was considered OTC if it was not traded on an EU trading venue. Under EMIR 3, a derivative is OTC if it is not cleared at an EU-authorised CCP or a CCP in a country the EU has recognised as equivalent. This matters because the EU has granted equivalence recognition to UK CCPs until 30 June 2028. EUR-denominated STIR contracts executed on UK CCPs that have not been found equivalent for that specific instrument category count as OTC for AAR scoping purposes.
On exemptions, EMIR 3 extends the existing EU pension scheme exemption to cover non-EU pension schemes authorised under national law that have been exempted from the clearing obligation in their home jurisdiction. A new exemption has been introduced for market-neutral post-trade risk reduction transactions, reflecting the EU’s recognition that certain compression and portfolio rebalancing activities should not be penalised by clearing requirements.
For margin on uncleared trades, EMIR 3 permanently exempts single-stock options and equity index options from the requirements to exchange initial and variation margin. This had previously been subject to temporary exemptions that required periodic renewal.
On intragroup reporting, EMIR 3 narrows an existing exemption that allowed non-financial counterparties to avoid reporting intragroup OTC derivative trades. The scope of this exemption has been reduced, meaning more intragroup trades will now require reporting to trade repositories.
CCP authorisation and supervision changes
EMIR 3 also streamlines the procedures by which CCPs obtain authorisation and extend their activities. The previous process was widely criticised as slow and unpredictable, with timelines that made it difficult for EU CCPs to compete with non-EU alternatives when bringing new products to market.
The revised framework introduces an accelerated procedure under Article 17a of EMIR for extensions of existing authorisation that are limited in scope. Extensions covering new tenors of existing instrument classes, new settlement currencies for already-cleared instruments, or minor contractual modifications can now be processed on a shorter timeline, with a reduced documentation requirement. Full re-authorisation is still required for genuinely new instrument categories or significant changes to a CCP’s operational structure.
ESMA’s supervisory role over EU CCPs has been strengthened. The regulation gives ESMA greater direct involvement in the authorisation process, reducing the degree to which national competent authorities act as sole gatekeepers. This reflects a broader EU policy direction toward centralising supervision of systemically important market infrastructure.
New and expanded reporting obligations
EMIR 3 introduces two categories of new reporting obligations that apply on top of the existing EMIR trade reporting framework.
The first is AAR reporting. Counterparties subject to the active account requirement must report semi-annually to their competent authority on the volume and types of derivatives cleared through their active EU CCP account. They must also confirm compliance with the representativeness obligation where applicable. Annual stress testing results must be submitted to demonstrate that the active account remains operationally functional. These reporting requirements apply regardless of whether a counterparty is subject to the operational requirement, the representativeness requirement, or both.
The second is third-country CCP reporting. Article 7d of EMIR 3 introduces an annual reporting obligation for EU clearing members and clients that clear transactions through recognised third-country CCPs. This covers any clearing member or client clearing through a CCP that ESMA has recognised under the EMIR third-country framework, including UK CCPs during the equivalence period. The content and format of this reporting will be specified in technical standards that ESMA is developing separately. The first reporting cycle covers the 2025 reference period, with reports due during the 2026 reporting cycle.
What firms need to do now
The practical implications of EMIR 3 depend on which parts of the regulation apply to a given firm.
Firms that are in scope for the active account requirement and had not already established an EU CCP account should have done so by 25 June 2025. If they have not, they are now in breach. The AAR notification to ESMA and the relevant national competent authority was due immediately upon becoming in scope.
Firms that clear more than 85% of their in-scope derivatives through authorised EU CCPs should document this calculation and retain it, as the 85% exemption is not self-executing. Competent authorities may request evidence that the threshold was met.
Firms that are clearing members or clients of recognised third-country CCPs need to prepare for the annual reporting obligation under Article 7d, covering 2025 clearing activity. The technical standards are being finalised, but firms should begin collecting the relevant data now rather than waiting for the standards to be adopted.
Firms using the revised intragroup NFC reporting exemption should review whether their existing reporting arrangements remain compliant under the narrower scope introduced by EMIR 3.
CCPs seeking to extend their authorisation to cover new instrument classes or activities should familiarise themselves with the accelerated procedure under Article 17a and assess whether their planned extensions qualify for the shorter timeline.
Monitoring the RTS pipeline
EMIR 3 is partly a framework regulation. Many of the specific compliance requirements depend on technical standards that ESMA is developing, consulting on, and submitting to the European Commission in stages. The AAR operational conditions RTS was adopted in October 2025. The third-country CCP reporting RTS is still being developed. The clearing thresholds review is under ESMA consultation.
For firms subject to EMIR 3, the headline obligations are clear. The implementation detail is not yet fully settled. Tracking the RTS pipeline is not optional for compliance teams: the level 2 standards are where the actual compliance requirements live.
Forseti monitors EU financial regulation continuously, including EMIR 3 RTS publications and ESMA consultation closures, so firms subject to the active account requirement are working from current requirements as the technical standards land. Start for free.
Subscribe for news updates.
The EU Deforestation Regulation prohibits placing certain commodities on the EU market if they are linked to deforestation after December 2020. This guide explains which products are in scope, what due diligence is required, and what non-EU suppliers need to provide.