In the paper Targeted consultation on the review of the central clearing framework in the EU from February 2022, one of the measures proposed for consideration by the European Commission (EC) was the requirement for an “active account” (ie the requirement to “maintain[…] an active account with an EU central counterparty (CCP) for the products that are available inside and outside the EU”). We understand that such a measure would require all, or a subset of, EU clearing participants to have an account at an EU CCP or a tier-1 CCP in addition to, or as an alternative to, an account at a tier-two third-country CCP.
We accept that having viable options is always good risk management, but note however that this is a tool that could, depending on how it is designed, add costs and risks for EU clearing participants (be they clearing members or clients).
As we understand that this proposal is under serious consideration by the EC, we provide analysis as to the potential consequences of different design choices.
We look at three policy options:
- Policy Option 1: No active accounts
- Policy Option 2: Active accounts without a target minimum level of activity
- Policy Option 3: Active accounts with qualitative and quantitative usage requirements – minimum activity levels
For each policy option we analyze the impact on market participants and how the policy option could be operationalized and supervised.
We also would like to refer to our paper A Roadmap to Make European Clearing More Attractive for proposals on how to make clearing in the EU more attractive without disadvantaging EU firms.
Documents (1) for Technical Paper on Active Accounts
Latest
ISDA Launches Pre-adherence Period for Notices Hub
ISDA has begun a pre-adherence process for the ISDA Notices Hub, enabling firms to sign up to a free protocol that will allow them to use the new platform when it launches on July 15. Under the ISDA Master Agreement,...
ISDA SIMM EU Regulatory Approval Requirements
ISDA published ISDA SIMM version 2.7+2412 on May 22 – the first recalibration under the new semiannual cycle. The release triggered a new requirement for EU counterparties to apply for regulatory authorization to use the model – a submission that...
Creating Value - IQ June 2025
Ever since its establishment 40 years ago, ISDA has worked to enhance the safety and efficiency of derivatives markets. That has motivated everything we do – from the development of standard documentation and the rollout of new digital solutions to...
Paper on EC’s Sustainability Omnibus Proposal
On June 9, ISDA published a position paper setting out its views on the European Commission’s (EC) Sustainability Omnibus Package. In the paper, ISDA urges European authorities to: Ensure a proportionate, harmonized and symmetrical approach to the use of derivatives...