Active Account Requirement: Key Innovation of the EMIR 3 Reform

RA Dr. Hendrik Müller-Lankow, LL.M. (UCL)
Sep 29
6 min read

Active EU CCP Account: Obligation, Minimum Usage, Implementation – Explained in Brief.

Symbolic Image: Active Account Requirement: Key Innovation of the EMIR 3 Reform

A key element of EMIR 3 (Regulation (EU) 2024/2987) is the introduction of an obligation to establish and actively use a clearing account with a central counterparty (CCP) established in the EU or EEA and authorised under EMIR (e.g. Eurex Clearing). The European legislator aims thereby to relocate at least part of systemically important clearing services from third countries into its own sphere of influence.

The Active Account Requirement consists of three pillars: operational obligations, a representativeness requirement and reporting obligations. The operational obligations concern the establishment and maintenance of a usable clearing account with an EU/EEA CCP. The representativeness requirement refers to the obligation to clear a representative share of derivative contracts through the active account. The additional reporting obligations relate to details of the derivatives portfolio as well as specific information on AAR compliance. Whether these obligations apply in part, in full, or not at all depends on the type and scope of the derivatives trading or portfolio.

This article provides an overview of the key requirements for the active account that must be established and used at an EU/EEA CCP under EMIR 3.

Background of the Active Account Requirement

The London Clearing House (LCH), more specifically LCH SwapClear, and ICE Clear Europe (ICEU), both located outside the EU/EEA, have become by far the market leaders for clearing interest rate derivatives, including those denominated in euro. For instance, LCH states that over 95% of vanilla interest rate swaps are cleared on its platform.

Following Brexit, counterparties on the European continent faced the risk of losing access to this attractive liquidity pool. Under EMIR, the clearing obligation must in principle be fulfilled via an EU/EEA CCP. To prevent competitive disadvantages in interest rate derivatives clearing, however, ESMA recognised LCH and ICEU as third-country CCPs, thereby maintaining EU counterparties’ access to their clearing services.

EU institutions, however, take a critical view of the market power of LCH and ICEU—both outside their direct sphere of influence. ESMA, for example, noted that the financial distress of a third-country CCP of systemic importance could affect the financial stability of the EU (ESMA91-372-1913). The Active Account Requirement is intended to ensure the partial relocation of clearing services to EU/EEA CCPs (Recital 11, Regulation (EU) 2024/2987).

Since When Does the Active Account Requirement under EMIR 3 Apply?

EMIR 3, including the provisions on the active account, was implemented by Regulation (EU) 2024/2987, which entered into force on 24 December 2024. For counterparties subject to the AAR for the first time, EMIR grants a six-month implementation period. Accordingly, the active account rules have applied since 25 June 2025 for counterparties that already fell within the material and personal scope of the AAR at the time EMIR 3 entered into force.

Which OTC Derivatives Does the AAR Apply To?

The material scope of the obligation to maintain an active account with an EU/EEA CCP (AAR) applies to the following categories of derivative contracts (hereinafter also: AAR contract categories):

Interest rate derivatives denominated in euro or Polish zloty;
Short-term interest rate derivatives (STIR) denominated in euro.

ESMA is authorised to amend the list of contracts subject to the active account obligation if it determines that they are of systemic importance. In its December 2021 report (ESMA91-372-1913), ESMA also classified euro-denominated credit default swaps (CDS) cleared at ICE Clear Europe (ICEU) at that time as systemically important. However, since such contracts are no longer cleared at ICEU, the AAR does not extend to EUR CDS.

The Active Account Requirement can, by necessity, apply only to relevant contracts for which EU/EEA CCPs actually offer clearing. This is, however, the case for all relevant contracts.

Who Is Required to Maintain an Active Account with an EU/EEA CCP?

The personal scope of the AAR may extend to both financial counterparties (FCs) and non-financial counterparties (NFCs). The category of financial counterparties includes, in particular, banks, investment firms, insurance companies and AIF/UCITS management companies. As a rule, any company may qualify as a non-financial counterparty.

The obligation to maintain an active account with an EU/EEA CCP arises if the following conditions are met:

The counterparty is subject to the clearing obligation. Financial and non-financial counterparties are subject to the clearing obligation if their aggregate average month-end position in relation to a clearing-obligated contract over the previous twelve months exceeds the relevant clearing threshold. If a financial counterparty exceeds the threshold, it becomes subject to the clearing obligation for all clearing-obligated contracts. For a non-financial counterparty, the clearing obligation arises only with respect to the contract type for which the threshold was exceeded, unless the positions can be shown to objectively reduce risks.

Exceeding the clearing threshold for AAR contract categories. The clearing threshold must be exceeded either in relation to a single AAR contract category or in aggregate across all AAR contract categories. For OTC interest rate derivatives, the threshold is set at a gross notional value of EUR 3 billion. The calculation is likewise based on the aggregate average month-end positions of the preceding twelve months.

German Derivatives Law | KRONSTEYN

What Special Rules Apply to Prudentially Consolidated Corporate Groups?

When determining whether a counterparty exceeds the clearing threshold in relation to the AAR contract categories, special rules apply to entities that are part of a prudentially consolidated group (under CRD/CRR, IFD/IFR, Solvency II or FICOD). In this assessment, such entities must take into account the derivative contracts cleared by themselves and by other group companies, excluding intragroup transactions. The calculation must include the derivative contracts of all group companies. This also covers third-country entities, in order to avoid creating incentives to shift clearing activities out of the EU (Recital 12, Regulation (EU) 2024/2987).

Operational Obligations Regarding the Active Account

If a counterparty is subject to the Active Account Requirement, this entails, in addition to the representativeness and reporting obligations, two core operational obligations:

Permanent functionality. The active account with an EU/EEA CCP must remain permanently operational, meaning that legal documentation must be in place, IT connectivity must be ensured, and the internal processes linked to the account must function properly.

Usability for high volumes and number of trades. The counterparty must have systems and resources enabling it to use the active account operationally—even at short notice—for large volumes and a high number of trades. New trades must be capable of being cleared through the account at any time.

The operational requirements are subject to at least one annual stress test, designed to ensure that the active account can handle a significant increase in clearing activity. Details of the operational obligations and stress tests will be set out in regulatory technical standards (RTS), which are expected to enter into force in Q4 2025 (draft by ESMA).

Counterparties are exempt from the operational obligations and stress tests if they clear at least 85% of their derivative contracts belonging to one of the AAR contract categories through an EU/EEA CCP.

Representativeness Requirement

A key obligation under the EMIR 3 Active Account Requirement is the representativeness requirement. This stipulates that at least a representative number of trades within the AAR contract categories must be cleared through the active account. The EU legislator’s aim is to reduce the share of systemically important trades cleared via third-country CCPs.

The representativeness requirement applies only to counterparties whose outstanding notional clearing volume in the relevant AAR contract categories is less than EUR 6 billion.

It covers the various categories of derivative contracts, trade maturities and trade sizes. For the purposes of the representativeness requirement, the following categories exist: EUR fixed-to-float, EUR OIS, EUR FRA, PLN fixed-to-float, PLN FRA, EUR STIR referencing Euribor, and EUR STIR referencing €STR. Subcategories are formed by combining maturity and trade size in a matrix.

EMIR 3 generally requires that, on an annual average, at least five trades in each of the key subcategories per contract category and reference period must be cleared through the active account. Further details are set out in the relevant regulatory technical standards (RTS), which are expected to enter into force in Q4 2025.

Additional Reporting Obligations

Bereits vor EMIR 3 waren Gegenparteien verpflichtet, die Einzelheiten sämtlicher von ihnen abgeschlossener Derivatekontrakte sowie deren Änderungen oder Beendigungen an ein Transaktionsregister zu melden. Mit der Active Account Requirement ist eine zusätzliche Meldepflicht hinzugekommen, deren Inhalte, Formate und Übermittlungswege sich deutlich unterscheiden.

Gegenparteien müssen Art und Umfang ihrer eigenen Geschäfte sowie der Geschäfte von Konzernunternehmen erfassen und diese Informationen alle sechs Monate an die zuständige Behörde (in Deutschland: BaFin) übermitteln. Zudem sind Angaben zur Erfüllung der operationalen Pflichten, einschließlich Stresstests, sowie zur Repräsentativitätspflicht zu melden. Die Einzelheiten zu Meldeinhalten und -formaten werden in den technischen Durchführungsstandards (RTS) geregelt, deren Inkrafttreten für Q4 2025 erwartet wird.

Von der zusätzlichen Meldepflicht sind Gegenparteien befreit, wenn sie mindestens 85 % ihrer Derivatekontrakte, die zu einer der AAR-Kontraktkategorien gehören, über eine EU/EWR-CCP clearen.

German Derivatives Law | KRONSTEYN

Conclusion

The Active Account Requirement under EMIR 3 is far more than a formal obligation to open an account. Market Participants must ensure at an early stage that their systems, contracts and internal processes are designed so that the active account not only exists but can also be used at any time – including stress tests, reporting and representative use. Institutions operating close to the clearing threshold or organised on a cross-border basis are particularly well advised to develop a compliance strategy in good time. This includes, among other things, reviewing group structures, adapting IT connectivity and maintaining clear documentation for Supervisory Authorities. Those who act early not only reduce regulatory risks but may also gain advantages in the competition for liquidity and connectivity.