← Back to updates
ESMA

ESMA

European Securities and Markets Authority

Medium Impact

ESMA publishes first Joint Monitoring Mechanism report on EMIR 3 clearing and Active Account Requirement monitoring

Published

Jul 6, 2026

Topics

EMIR 3, Active Account Requirement, Central counterparties, Clearing, Tier 2 CCPs, Derivatives reporting, Financial stability

Executive Summary

ESMA has published the first annual report of the Joint Monitoring Mechanism established under EMIR 3 to coordinate cross-sector monitoring of the EU clearing ecosystem. The report is not itself a new rulebook, but it is a significant supervisory signal for firms subject to the Active Account Requirement. ESMA reports that the JMM became operational in April 2025 and developed a three-pillar monitoring framework covering entities in scope, clearing activity and risk exposures. Early evidence indicates a moderate but still limited increase in use of EU CCPs, especially by smaller entities and in selected AAR products, while Tier 2 CCPs continue to dominate most in-scope clearing. ESMA also highlights data limitations before dedicated AAR reporting becomes available during the second half of 2026. Banks, asset managers, pension funds, insurers, clearing members and EU CCPs should expect continued scrutiny of AAR notifications, semi-annual reporting, operational readiness and exposure reduction evidence ahead of the planned 2027 effectiveness assessment.

What Changed

newFirst JMM annual monitoring report

Previous

There was no published annual JMM report before the mechanism became operational.

New

The JMM reports annually to the European Parliament, Council and Commission on clearing monitoring activities under Article 23b of EMIR.

newAggregate AAR monitoring framework

Previous

AAR monitoring had not yet been operationalised at aggregate EU level.

New

ESMA and JMM members are using EMIR Article 9 data, AAR notifications, supervisory CCP data and public CCP disclosures to monitor implementation.

modifiedSupervisory view of AAR implementation status

Previous

Before EMIR 3 implementation, ESMA’s baseline analysis showed large-scale AAR-relevant clearing with significant activity concentrated at Tier 2 CCPs.

New

The population notified to ESMA and NCAs captures more than 90% of EU entities’ gross and absolute net notional in AAR-related products, although many smaller active entities have not notified.

modifiedClearing-location evidence

Previous

At end-2024, EU CCP shares were limited in several AAR products, including approximately 20% of EUR IRS, 6% of EUR OIS, 8% of PLN IRS and 3% of Euribor futures open interest.

New

Tier 2 CCPs continue to hold more than 50% market share in most AAR products and in some cases 90% or more, so exposure reduction remains a key monitoring question.

newBroader cross-border dependency monitoring

Previous

The immediate EMIR 3 policy focus was excessive reliance on substantially systemic Tier 2 clearing services.

New

The JMM intends to continue monitoring cross-border dependencies where resources allow, supported by existing ESMA, ESRB and EMIR 3 reporting channels.

Business Impact

Who is affected

Directly affected

EU financial and non-financial counterparties subject to the EMIR 3 Active Account Requirement, including banks, investment funds, pension funds, insurers and groups clearing in in-scope EUR and PLN interest rate derivative or EUR STIR products.

Indirectly affected

clearing members, EU CCPs, Tier 2 CCP users, clients, treasury, collateral, risk, operations, regulatory reporting, data governance and compliance teams supporting clearing decisions or AAR evidence.

Jurisdictions

European Union, European Economic Area, United Kingdom, United States

Business processes

AAR scoping and notification, Semi-annual AAR compliance reporting, Active account operational readiness and annual stress testing, Clearing location governance, Initial margin, default fund and collateral monitoring, EMIR Article 9 derivatives data quality, Cross-border CCP dependency monitoring

Estimated effort

Medium

Compliance risk

Medium

Affected Reports

AAR notification to ESMA and national competent authoritiesSemi-annual AAR activity, exposure and operational compliance reportingAnnual active-account stress-test evidenceInternal EU CCP versus Tier 2 CCP exposure dashboardEMIR Article 9 derivatives data quality and reconciliation controls
FieldValidation rule
Legal entity identifierThe ESMA AAR notification template described in the report includes identifying information on the notifying entity, including its LEI.
Entity sectorThe AAR notification template described in the report includes the notifying entity’s sector.
Ultimate parentThe AAR notification template described in the report includes ultimate parent information.
Relevant quantitative AAR thresholdsThe AAR notification template described in the report includes information on the relevant quantitative thresholds used for AAR scoping.
Activities and risk exposuresThe EMIR 3 AAR reporting framework described in the report requires semi-annual information on activities and risk exposures.
Operational compliance demonstrationThe report states that entities must demonstrate compliance with AAR operational requirements, including functional active accounts and annual stress-test capacity.

Recommended Actions

7 suggested next steps· derived from source analysis
  1. 1
    AI generatedStep 1 of 7

    Revalidate AAR scoping at entity and group level using current cleared products, currencies, notional thresholds and group-structure data.

  2. 2
    AI generatedStep 2 of 7

    Confirm that all in-scope entities have filed or can evidence required AAR notifications to ESMA and the relevant national competent authority.

  3. 3
    AI generatedStep 3 of 7

    Build a recurring management dashboard showing EU CCP versus Tier 2 CCP volumes, open interest, notional, initial margin and collateral by AAR product.

  4. 4
    AI generatedStep 4 of 7

    Prepare for semi-annual AAR reporting by mapping source systems to activity, risk exposure and operational compliance data categories.

  5. 5
    AI generatedStep 5 of 7

    Document annual active-account stress-test methodology, assumptions, account capacity, connectivity, legal documentation and escalation evidence.

  6. 6
    AI generatedStep 6 of 7

    Review clearing-location governance to evidence why liquidity, collateral cost, netting, client duty and operational factors support clearing decisions.

  7. 7
    AI generatedStep 7 of 7

    Monitor ESMA’s 2026 interim AAR assessment and the planned 2027 effectiveness assessment for potential follow-up supervisory expectations.

Timeline

other

Dec 2021

ESMA identified three UK Tier 2 CCP clearing services as substantially systemically important for EU financial stability: EUR and PLN IRD at LCH Ltd, and EUR CDS and EUR STIR at ICE Clear Europe.

other

2023

ICE Clear Europe closed its CDS clearing business; ESMA states the AAR now applies to OTC EUR and PLN IRDs and EUR STIRs.

publication

Nov 27, 2024

Regulation (EU) 2024/2987, known as EMIR 3, was adopted, introducing the AAR and establishing the JMM under EMIR Article 23b.

implementation

Dec 2024

ESMA published an AAR notification template for entities within scope.

implementation

Feb 2025

ESMA’s Board of Supervisors approved the JMM terms of reference.

implementation

Apr 2025

The JMM became operational.

publication

Jun 19, 2025

ESMA published the regulatory technical standards specifying AAR conditions.

other

Oct 29, 2025

The European Commission adopted the regulatory technical standards specifying AAR conditions.

publication

Feb 6, 2026

The regulatory technical standards specifying AAR conditions were published in the Official Journal of the European Union.

other

Jun 2026

ESMA’s first interim report on AAR effectiveness was expected to be ready.

publication

Jul 6, 2026

ESMA published the first annual report of the Joint Monitoring Mechanism.

implementation

Date not specified

Dedicated AAR reporting data is expected to become available gradually during the second half of 2026; the first reporting is expected in summer 2026.

other

2027

A more comprehensive assessment of AAR effectiveness is foreseen, with outcomes to be reflected in a report to the European Parliament, Council and Commission.

Sources

AI-generated analysis is based on the following primary sources. Always verify against the official publication.

Related Evidence

Verified source support for this analysis

The evidence agent checks whether the drafted finding is supported by official publications and relevant public source material.

Receive updates like this by email

Get AI-generated analysis for the regulators and topics you care about.

Pulse is built by Datox. Datox automates AIFMD Annex IV and SEC Form PF reporting end to end.

See the Datox platform