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ESMA proposes to increase NFC EMIR clearing threshold

ESMA has today published this Final Report together with this press release recommending to the European Commission that the Non Financial Counterparty (NFC) EMIR clearing threshold be raised from 3bn Euros to 4bn Euros. The report also recommends changing the way in which in scope transactions are determined, to include only those which are not cleared (rather than any transaction not executed on a recognised Regulated Market). The report follows a discussion paper released late last year (see here).

The change has been desired by NFC market participants due to the non recognition of UK based Regulated Markets after Brexit. Such a lack of recognition requires EU based entities to include non risk offsetting positions executed on those markets in the clearing threshold calculation. More recently, higher prices have also consumed the thresholds.

The report suggests that the increase be temporary, and suggests implementing the change as soon as possible.

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Published 23 November 2022