Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories Text with EEA relevance

TITLE I SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

Subject matter and scope

• (a) the members of the ESCB and other Member States’ bodies performing similar functions and other Union public bodies charged with or intervening in the management of the public debt;

• (b) the Bank for International Settlements;

• (c) the central banks and public bodies charged with or intervening in the management of the public debt in the following countries:
• (i) Japan;
• (ii) United States of America;
• (iii) Australia;
• (iv) Canada;
• (v) Hong Kong;
• (vi) Mexico;
• (vii) Singapore;
• (viii) Switzerland;
• (ix) the United Kingdom of Great Britain and Northern Ireland.

• (a) multilateral development banks, as listed under Section 4.2 of Part 1 of Annex VI to Directive 2006/48/EC;

• (b) public sector entities within the meaning of point (18) of Article 4 of Directive 2006/48/EC where they are owned by central governments and have explicit guarantee arrangements provided by central governments;

• (c) the European Financial Stability Facility and the European Stability Mechanism.

To that end, by 17 November 2012 the Commission shall present to the European Parliament and the Council a report assessing the international treatment of public bodies charged with or intervening in the management of the public debt and central banks.

The report shall include a comparative analysis of the treatment of those bodies and of central banks within the legal framework of a significant number of third countries, including at least the three most important jurisdictions as regards volumes of contracts traded, and the risk-management standards applicable to the derivative transactions entered into by those bodies and by central banks in those jurisdictions. If the report concludes, in particular in regard to the comparative analysis, that the exemption of the monetary responsibilities of those third-country central banks from the clearing and reporting obligation is necessary, the Commission shall add them to the list set out in paragraph 4.

Article 2

Definitions

For the purposes of this Regulation, the following definitions shall apply:

• (1) ‘CCP’ means a legal person that interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer;

• (2) ‘trade repository’ means a legal person that centrally collects and maintains the records of derivatives;

• (3) ‘clearing’ means the process of establishing positions, including the calculation of net obligations, and ensuring that financial instruments, cash, or both, are available to secure the exposures arising from those positions;

• (4) ‘trading venue’ means a system operated by an investment firm or a market operator within the meaning of Article 4(1)(1) and 4(1)(13) of Directive 2004/39/EC other than a systematic internaliser within the meaning of Article 4(1)(7) thereof, which brings together buying or selling interests in financial instruments in the system, in a way that results in a contract in accordance with Title II or III of that Directive;

• (5) ‘derivative’ or ‘derivative contract’ means a financial instrument as set out in points (4) to (10) of Section C of Annex I to Directive 2004/39/EC as implemented by Article 38 and 39 of Regulation (EC) No 1287/2006;

• (6) ‘class of derivatives’ means a subset of derivatives sharing common and essential characteristics including at least the relationship with the underlying asset, the type of underlying asset, and currency of notional amount. Derivatives belonging to the same class may have different maturities;

• (7) ‘OTC derivative’ or ‘OTC derivative contract’ means a derivative contract the execution of which does not take place on a regulated market within the meaning of Article 4(1)(14) of Directive 2004/39/EC or on a third-country market considered to be equivalent to a regulated market in accordance with Article 2a of this Regulation;

• (8) ‘financial counterparty’ means:
• (a) an investment firm authorised in accordance with Directive 2014/65/EU of the European Parliament and of the Council ([^E0001]);
• (b) a credit institution authorised in accordance with Directive 2013/36/EU of the European Parliament and of the Council ([^E0002]);
• (c) an insurance undertaking or reinsurance undertaking authorised in accordance with Directive 2009/138/EC of the European Parliament and of the Council ([^E0003]);
• (d) a UCITS and, where relevant, its management company, authorised in accordance with Directive 2009/65/EC, unless that UCITS is set up exclusively for the purpose of serving one or more employee share purchase plans;
• (e) an institution for occupational retirement provision (IORP), as defined in point (1) of Article 6 of Directive (EU) 2016/2341 of the European Parliament and of the Council ([^E0004]);
• (f) an alternative investment fund (AIF), as defined in point (a) of Article 4(1) of Directive 2011/61/EU, which is either established in the Union or managed by an alternative investment fund manager (AIFM) authorised or registered in accordance with that Directive, unless that AIF is set up exclusively for the purpose of serving one or more employee share purchase plans, or unless that AIF is a securitisation special purpose entity as referred to in point (g) of Article 2(3) of Directive 2011/61/EU, and, where relevant, its AIFM established in the Union;
• (g) a central securities depository authorised in accordance with Regulation (EU) No 909/2014 of the European Parliament and of the Council ([^E0005]);

• (9) ‘non-financial counterparty’ means an undertaking established in the Union other than the entities referred to in points (1) and (8);

• (10) ‘pension scheme arrangement’ means:
• (a) institutions for occupational retirement provision within the meaning of Article 6(a) of Directive 2003/41/EC, including any authorised entity responsible for managing such an institution and acting on its behalf as referred to in Article 2(1) of that Directive as well as any legal entity set up for the purpose of investment of such institutions, acting solely and exclusively in their interest;
• (b) occupational retirement provision businesses of institutions referred to in Article 3 of Directive 2003/41/EC;
• (c) occupational retirement provision businesses of life insurance undertakings covered by Directive 2002/83/EC, provided that all assets and liabilities corresponding to the business are ring-fenced, managed and organised separately from the other activities of the insurance undertaking, without any possibility of transfer;
• (d) any other authorised and supervised entities, or arrangements, operating on a national basis, provided that:
• (i) they are recognised under national law; and
• (ii) their primary purpose is to provide retirement benefits;

• (11) ‘counterparty credit risk’ means the risk that the counterparty to a transaction defaults before the final settlement of the transaction’s cash flows;

• (12) ‘interoperability arrangement’ means an arrangement between two or more CCPs that involves a cross-system execution of transactions;

• (13) ‘competent authority’ means the competent authority referred to in the legislation referred to in point (8) of this Article, the competent authority referred to in Article 10(5) or the authority designated by each Member State in accordance with Article 22;

• (14) ‘clearing member’ means an undertaking which participates in a CCP and which is responsible for discharging the financial obligations arising from that participation;

• (15) ‘client’ means an undertaking with a contractual relationship with a clearing member of a CCP which enables that undertaking to clear its transactions with that CCP;

• (16) ‘group’ means the group of undertakings consisting of a parent undertaking and its subsidiaries within the meaning of Articles 1 and 2 of Directive 83/349/EEC or the group of undertakings referred to in Article 3(1) and Article 80(7) and (8) of Directive 2006/48/EC;

• (17) ‘financial institution’ means an undertaking other than a credit institution, the principal activity of which is to acquire holdings or to carry on one or more of the activities listed in points (2) to (12) of Annex I to Directive 2006/48/EC;

• (18) ‘financial holding company’ means a financial institution, the subsidiary undertakings of which are either exclusively or mainly credit institutions or financial institutions, at least one of such subsidiary undertakings being a credit institution, and which is not a mixed financial holding company within the meaning of Article 2(15) of Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate ([^E0006]);

• (19) ‘ancillary services undertaking’ means an undertaking the principal activity of which consists in owning or managing property, managing data-processing services, or a similar activity which is ancillary to the principal activity of one or more credit institution;

• (20) ‘qualifying holding’ means any direct or indirect holding in a CCP or trade repository which represents at least 10 % of the capital or of the voting rights, as set out in Articles 9 and 10 of Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market ([^E0007]), taking into account the conditions regarding aggregation thereof laid down in Article 12(4) and (5) of that Directive, or which makes it possible to exercise a significant influence over the management of the CCP or trade repository in which that holding subsists;

• (21) ‘parent undertaking’ means a parent undertaking as described in Articles 1 and 2 of Directive 83/349/EEC;

• (22) ‘subsidiary’ means a subsidiary undertaking as described in Articles 1 and 2 of Directive 83/349/EEC, including a subsidiary of a subsidiary undertaking of an ultimate parent undertaking;

• (23) ‘control’ means the relationship between a parent undertaking and a subsidiary, as described in Article 1 of Directive 83/349/EEC;

• (24) ‘close links’ means a situation in which two or more natural or legal persons are linked by:
• (a) participation, by way of direct ownership or control, of 20 % or more of the voting rights or capital of an undertaking; or
• (b) control or a similar relationship between any natural or legal person and an undertaking or a subsidiary of a subsidiary also being considered a subsidiary of the parent undertaking which is at the head of those undertakings. A situation in which two or more natural or legal persons are permanently linked to one and the same person by a control relationship shall also be regarded as constituting a close link between such persons.

• (25) ‘capital’ means subscribed capital within the meaning of Article 22 of Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions ([^E0008]) in so far it has been paid up, plus the related share premium accounts, it fully absorbs losses in going concern situations, and, in the event of bankruptcy or liquidation, it ranks after all other claims;

• (26) ‘reserves’ means reserves as set out in Article 9 of Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies ([^E0009]) and profits and losses brought forward as a result of the application of the final profit or loss;

• (27) ‘board’ means administrative or supervisory board, or both, in accordance with national company law;

• (28) ‘independent member’ of the board means a member of the board who has no business, family or other relationship that raises a conflict of interests regarding the CCP concerned or its controlling shareholders, its management or its clearing members, and who has had no such relationship during the five years preceding his membership of the board;

• (29) ‘senior management’ means the person or persons who effectively direct the business of the CCP or the trade repository, and the executive member or members of the board;

• (30) ‘covered bond’ means a bond meeting the requirements of Article 129 of Regulation (EU) No 575/2013;

• (31) ‘covered bond entity’ means the covered bond issuer or cover pool of a covered bond.

Article 2a

Equivalence decisions for the purposes of the definition of OTC derivatives

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 86(2) of this Regulation.

Article 3

Intragroup transactions

• (a) both counterparties are included in the same consolidation on a full basis and they are subject to appropriate centralised risk evaluation, measurement and control procedures; and

• (b) that other counterparty is established in the Union or, if it is established in a third country, that third country is not identified under paragraph 4 or under the delegated acts adopted pursuant to paragraph 5.

• (a) an OTC derivative contract entered into with another counterparty which is part of the same group, provided that all of the following conditions are met:
• (i) the financial counterparty is established in the Union or, if it is established in a third country, that third country is not identified under paragraph 4 or under the delegated acts adopted pursuant to paragraph 5;
• (ii) the other counterparty is a financial counterparty, a financial holding company, a financial institution or an ancillary services undertaking subject to appropriate prudential requirements;
• (iii) both counterparties are included in the same consolidation on a full basis; and
• (iv) both counterparties are subject to appropriate centralised risk evaluation, measurement and control procedures;

• (b) an OTC derivative contract entered into with another counterparty where both counterparties are part of the same institutional protection scheme, referred to in Article 113(7) of Regulation (EU) No 575/2013, provided that the condition set out in point (a)(ii) of this paragraph is met;

• (c) an OTC derivative contract entered into between credit institutions affiliated to the same central body or between such credit institution and the central body, as referred to in Article 10(1) of Regulation (EU) No 575/2013;

• (d) an OTC derivative contract entered into with a non-financial counterparty which is part of the same group, provided that the following conditions are met:
• (i) both counterparties to the derivative contract are included in the same consolidation on a full basis and they are subject to appropriate centralised risk evaluation, measurement and control procedures; and
• (ii) the non-financial counterparty is established in the Union or, if it is established in a third country, that third country is not identified under paragraph 4 or under the delegated acts adopted pursuant to paragraph 5.

• (a) included in a consolidation in accordance with Directive 2013/34/EU of the European Parliament and of the Council ([^E0010]) or with the International Financial Reporting Standards (IFRS) adopted pursuant to Regulation (EC) No 1606/2002 or, in relation to a group the parent undertaking of which has its head office in a third country, in accordance with generally accepted accounting principles of a third country determined to be equivalent to IFRS in accordance with Commission Regulation (EC) No 1569/2007 ([^E0011]) (or accounting standards of a third country the use of which is permitted in accordance with Article 4 of that Regulation); or

• (b) covered by the same consolidated supervision in accordance with Directive 2013/36/EU or, in relation to a group the parent undertaking of which has its head office in a third country, the same consolidated supervision by a third-country competent authority verified as equivalent to that governed by the principles laid down in Article 127 of that Directive.

• (a) where the third country is a high-risk third country, as referred to in Article 9 of Directive (EU) 2015/849 of the European Parliament and of the Council ([^E0012]);

• (b) where the third country is listed in Annex I to the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes in its most up-to-date version.

TITLE II CLEARING, REPORTING AND RISK MITIGATION OF OTC DERIVATIVES

Article 4

Clearing obligation

• (a) they have been concluded in one of the following ways:
• (i) between two financial counterparties that meet the conditions set out in the second subparagraph of Article 4a(1);
• (ii) between a financial counterparty that meets the conditions set out in the second subparagraph of Article 4a(1) and a non-financial counterparty that meets the conditions set out in the second subparagraph of Article 10(1);
• (iii) between two non-financial counterparties that meet the conditions set out in the second subparagraph of Article 10(1);
• (iv) between, on the one side, a financial counterparty that meets the conditions set out in the second subparagraph of Article 4a(1) or a non-financial counterparty that meets the conditions set out in the second subparagraph of Article 10(1), and, on the other side, an entity established in a third country that would be subject to the clearing obligation if it were established in the Union;
• (v) between two entities established in one or more third countries that would be subject to the clearing obligation if they were established in the Union, provided that the contract has a direct, substantial and foreseeable effect within the Union or where such an obligation is necessary or appropriate to prevent the evasion of any provisions of this Regulation; and

• (b) they are entered into or novated on or after the date on which the clearing obligation takes effect, provided that, on the date they are entered into or novated, both counterparties meet the conditions set out in point (a).

The obligation to clear all OTC derivative contracts shall not apply to contracts concluded in the situations referred to in the first subparagraph, point (a)(iv), between, on the one side, a financial counterparty that meets the conditions set out in Article 4a(1), second subparagraph, or a non-financial counterparty that meets the conditions set out in Article 10(1), second subparagraph, and, on the other side, a pension scheme arrangement that is established in a third country and that operates on a national basis, provided that it is authorised, supervised and recognised under national law, and where its primary purpose is to provide retirement benefits and it is exempted from the clearing obligation under that national law.

The exemption set out in the first subparagraph shall apply only:

• (a) where two counterparties established in the Union belonging to the same group have first notified their respective competent authorities in writing that they intend to make use of the exemption for the OTC derivative contracts concluded between each other. The notification shall be made not less than 30 calendar days before the use of the exemption. Within 30 calendar days after receipt of that notification, the competent authorities may object to the use of this exemption if the transactions between the counterparties do not meet the conditions laid down in Article 3, without prejudice to the right of the competent authorities to object after that period of 30 calendar days has expired where those conditions are no longer met. If there is disagreement between the competent authorities, ESMA may assist those authorities in reaching an agreement in accordance with its powers under Article 19 of Regulation (EU) No 1095/2010;

• (b) to OTC derivative contracts between two counterparties belonging to the same group which are established in a Member State and in a third country, where the counterparty established in the Union has been authorised to apply the exemption by its competent authority within 30 calendar days after it has been notified by the counterparty established in the Union, provided that the conditions laid down in Article 3 are met. The competent authority shall notify ESMA of that decision.

For that purpose a counterparty shall become a clearing member, a client, or shall establish indirect clearing arrangements with a clearing member, provided that those arrangements do not increase counterparty risk and ensure that the assets and positions of the counterparty benefit from protection with equivalent effect to that referred to in Articles 39 and 48.

3a. Without being obliged to contract, clearing members and clients which provide clearing services, whether directly or indirectly, shall provide those services under fair, reasonable, non-discriminatory and transparent commercial terms. Such clearing members and clients shall take all reasonable measures to identify, prevent, manage and monitor conflicts of interest, in particular between the trading unit and the clearing unit, that may adversely affect the fair, reasonable, non-discriminatory and transparent provision of clearing services. Such measures shall also be taken where trading and clearing services are provided by different legal entities belonging to the same group.

Clearing members and clients shall be permitted to control the risks related to the clearing services offered.

The Commission is empowered to adopt delegated acts in accordance with Article 82 to supplement this Regulation by specifying the conditions under which the commercial terms referred to in the first subparagraph of this paragraph are to be considered to be fair, reasonable, non-discriminatory and transparent, based on the following:

• (a) fairness and transparency requirements with respect to fees, prices, discount policies and other general contractual terms and conditions regarding the price list, without prejudice to the confidentiality of contractual arrangements with individual counterparties;

• (b) factors that constitute reasonable commercial terms to ensure unbiased and rational contractual arrangements;

• (c) requirements that facilitate clearing services on a fair and non-discriminatory basis, having regard to related costs and risks, so that any differences in prices charged are proportionate to costs, risks and benefits; and

• (d) risk control criteria for the clearing member or client related to the clearing services offered.

ESMA shall submit those draft regulatory technical standards to the Commission by 30 September 2012.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

• (a) in the case of securitisation special purpose entities, the securitisation special purpose entity shall solely issue securitisations that meet the requirements of Article 18, and of Articles 19 to 22 or 23 to 26 of Regulation (EU) 2017/2402 (the Securitisation Regulation);

• (b) the OTC derivative contract is used only to hedge interest rate or currency mismatches under the covered bond or securitisation; and

• (c) the arrangements under the covered bond or securitisation adequately mitigate counterparty credit risk with respect to the OTC derivative contracts concluded by the covered bond entity or securitisation special purpose entity in connection with the covered bond or securitisation.

The ESAs shall submit those draft regulatory technical standards to the Commission by 18 July 2018.

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in this paragraph in accordance with Articles 10 to 14 of Regulations (EU) No 1093/2010, (EU) No 1094/2010 or (EU) No 1095/2010.

Article 4a

Financial counterparties that are subject to the clearing obligation

Where a financial counterparty does not calculate its positions, or where the result of that calculation exceeds any of the clearing thresholds specified pursuant to point (b) of Article 10(4), the financial counterparty shall:

• (a) immediately notify ESMA and the relevant competent authority thereof, and, where relevant, indicate the period used for the calculation;

• (b) establish clearing arrangements within four months after the notification referred to in point (a) of this subparagraph; and

• (c) become subject to the clearing obligation referred to in Article 4 for all OTC derivative contracts pertaining to any class of OTC derivatives which is subject to the clearing obligation entered into or novated more than four months following the notification referred to in point (a) of this subparagraph.

The financial counterparty shall be able to demonstrate to the relevant competent authority that the calculation of the aggregate month-end average position for the previous 12 months does not lead to a systematic underestimation of that position.

Notwithstanding the first subparagraph, for UCITS and AIFs, the positions referred to in paragraph 1 shall be calculated at the level of the fund.

UCITS management companies which manage more than one UCITSs and AIFMs which manage more than one AIF shall be able to demonstrate to the relevant competent authority that the calculation of positions at the fund level does not lead to:

• (a) a systematic underestimation of the positions of any of the funds they manage or the positions of the manager; and

• (b) a circumvention of the clearing obligation.

The relevant competent authorities of the financial counterparty and of the other entities within the group shall establish cooperation procedures to ensure the effective calculation of the positions at the group level.

Where ESMA, in accordance with Article 10(4a), reviews the clearing thresholds specified pursuant to Article 10(4), first subparagraph, point (b), ESMA shall also review the clearing threshold specified pursuant to the first subparagraph of this paragraph.

ESMA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by 25 December 2025.

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 4b

Post-trade risk reduction services

• (a) the entity performing the PTRR exercise (‘PTRR service provider’) complies with the requirements set out under paragraphs 3 and 4 of this Article; and

• (b) each participant in the PTRR exercise complies with the requirements under paragraph 3 of this Article.

• (a) be performed by an entity authorised in accordance with Article 7 of the Directive 2014/65/EU that is independent of the counterparties to the OTC derivative contracts included in the PTRR exercise;

• (b) achieve a reduction in risk in each of the portfolios submitted to the PTRR exercise;

• (c) be accepted in full and, as a result, the participants in the PTRR exercise shall not be able to choose which trades to execute under the PTRR exercise;

• (d) be open for participation only to the entities that initially submitted a portfolio to the PTRR exercise;

• (e) be market risk neutral;

• (f) not contribute to price formation;

• (g) take the form of a compression, rebalancing or optimisation exercise or a combination thereof;

• (h) be executed on a bilateral or multilateral basis.

• (a) comply with the pre-agreed rules of the PTRR exercise, including methods and algorithms in prescheduled cycles, and act in a reasonable, transparent and non-discriminatory manner;

• (b) ensure that entities participating in a PTRR exercise have no influence over the result of the PTRR exercise;

• (c) undertake regular compression exercises where PTRR exercises result in new PTRR transactions;

• (d) keep complete and accurate records of all transactions executed pursuant to a PTRR exercise, including:
• (i) information on transactions entered into as part of the PTRR exercise;
• (ii) transactions resulting from the PTRR exercise either as modified transactions or as new transactions; and
• (iii) the overall change in the risk of the different portfolios included in the PTRR exercise;

• (e) upon request make available, without undue delay, the records referred to in point (d) to the relevant competent authority and to ESMA; and

• (f) monitor the transactions resulting from the PTRR exercise in order to ensure, to the extent possible, that the PTRR exercise does not result in any misuse or circumvention of the clearing obligation.

• (a) notify the name of the PTRR service provider to ESMA; and

• (b) share with ESMA its assessment of how the requirements referred to in paragraphs 3 and 4 are complied with by the PTRR service provider.

The competent authority referred to in the first subparagraph shall, at least on an annual basis, confirm to ESMA that the PTRR service provider continues to comply with the requirements referred to in paragraphs 3 and 4 or that the PTRR service provider is no longer providing PTRR services, as applicable.

ESMA shall transmit the information received under the first and second subparagraphs of this paragraph to the authorities of each Member State with supervisory powers in relation to the clearing obligation referred to in Article 4(1).

The competent authority referred to in the first subparagraph of this paragraph shall, without undue delay, notify ESMA where a PTRR service provider no longer complies with the requirements referred to in paragraphs 3 and 4. Upon such notification, ESMA shall remove the PTRR service provider from the list referred to in the fifth subparagraph of this paragraph. From the date when the PTRR service provider has been removed from that list, PTRR transactions resulting from a PTRR exercise performed by that PTRR service provider shall no longer be exempted from the clearing obligation in accordance with paragraph 1.

ESMA shall, on a yearly basis, publish a list of PTRR service providers notified to ESMA under the first subparagraph, point (a).

• (a) what constitutes market risk neutrality in a PTRR exercise;

• (b) the required risk reduction in submitted portfolios;

• (c) the possible inclusion of mixed portfolios containing both cleared and uncleared transactions in the same PTRR exercise and the conditions under which such inclusion would be allowed;

• (d) requirements regarding the management of the PTRR exercise;

• (e) requirements for different types of PTRR services;

• (f) the process for monitoring the application of the exemption granted; and

• (g) the criteria to apply when assessing whether the clearing obligation is circumvented.

ESMA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by 25 December 2025.

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 5

Clearing obligation procedure

• (a) the class of OTC derivatives that should be subject to the clearing obligation referred to in Article 4;

• (b) the date or dates from which the clearing obligation takes effect, including any phase in and the categories of counterparties to which the obligation applies.

Power is delegated to the Commission to adopt regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

In the developing of the draft regulatory technical standards under this paragraph ESMA shall not prejudice the transitional provision relating to C6 energy derivative contracts as laid down in Article 95 of Directive 2014/65/EU ([^E0014]).

Following the notification, ESMA shall publish a call for a development of proposals for the clearing of those classes of derivatives.

• (a) the degree of standardisation of the contractual terms and operational processes of the relevant class of OTC derivatives;

• (b) the volume and liquidity of the relevant class of OTC derivatives;

• (c) the availability of fair, reliable and generally accepted pricing information in the relevant class of OTC derivatives.

In preparing those draft regulatory technical standards, ESMA may take into consideration the interconnectedness between counterparties using the relevant classes of OTC derivatives, the anticipated impact on the levels of counterparty credit risk between counterparties as well as the impact on competition across the Union.

In order to ensure consistent application of this Article, ESMA shall develop draft regulatory technical standards further specifying the criteria referred to in points (a), (b) and (c) of the first subparagraph.

ESMA shall submit those draft regulatory technical standards to the Commission by 30 September 2012.

Power is delegated to the Commission to adopt regulatory technical standards referred to in the third subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

• (a) the expected volume of the relevant class of OTC derivatives;

• (b) whether more than one CCP already clear the same class of OTC derivatives;

• (c) the ability of the relevant CCPs to handle the expected volume and to manage the risk arising from the clearing of the relevant class of OTC derivatives;

• (d) the type and number of counterparties active, and expected to be active within the market for the relevant class of OTC derivatives;

• (e) the period of time a counterparty subject to the clearing obligation needs in order to put in place arrangements to clear its OTC derivative contracts through a CCP;

• (f) the risk management and the legal and operational capacity of the range of counterparties that are active in the market for the relevant class of OTC derivatives and that would be captured by the clearing obligation pursuant to Article 4(1).

Article 6

Public register

• (a) the classes of OTC derivatives that are subject to the clearing obligation pursuant to Article 4;

• (b) the CCPs that are authorised in accordance with Article 17 or recognised in accordance with Article 25 and the date of authorisation or recognition respectively, indicating the CCPs that are authorised or recognised for the purpose of the clearing obligation;

• (c) the dates from which the clearing obligation takes effect, including any phased-in implementation;

• (d) the classes of OTC derivatives identified by ESMA in accordance with Article 5(3);

• (f) the CCPs that have been notified to ESMA by the competent authority for the purpose of the clearing obligation and the date of notification of each of them;

• (g) the proportion, as of the end of the calendar year, of derivatives contracts cleared in CCPs authorised in accordance with Article 14 compared with derivatives contracts cleared in third-country CCPs recognised in accordance with Article 25, presented on an aggregated basis and per asset class.

ESMA shall submit any such draft regulatory technical standards to the Commission by 30 September 2012.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 6a

Suspension of clearing obligation

• (a) the specific classes of OTC derivatives are no longer suitable for central clearing in accordance with the criteria referred to in the first subparagraph of Article 5(4) and in Article 5(5);

• (b) a CCP is likely to cease clearing those specific classes of OTC derivatives and no other CCP is able to clear those specific classes of OTC derivatives without interruption;

• (c) the suspension of the clearing obligation for those specific classes of OTC derivatives or for a specific type of counterparty is necessary to avoid or address a serious threat to financial stability or to the orderly functioning of financial markets in the Union and that suspension is proportionate to those aims.

For the purposes of point (c) of the first subparagraph, prior to the request referred to in the first subparagraph, ESMA shall consult the ESRB and the competent authorities designated in accordance with Article 22.

The request referred to in the first subparagraph shall be accompanied by evidence that at least one of the conditions set out therein is met.

Where the suspension of the clearing obligation is considered by ESMA to be a material change in the criteria for the trading obligation to take effect referred to in Article 32(5) of Regulation (EU) No 600/2014, the request referred to in the first subparagraph of this paragraph may also include a request to suspend the trading obligation laid down in Article 28(1) and (2) of that Regulation for the same specific classes of OTC derivatives that are subject to the request to suspend the clearing obligation.

ESMA shall, within 48 hours of receipt of the request from the competent authority referred to in the first subparagraph of this paragraph, on the basis of the reasons and evidence provided by the competent authority, either request that the Commission suspend the clearing obligation referred to in Article 4(1) or reject the request referred to in the first subparagraph of this paragraph. ESMA shall inform the competent authority concerned of its decision. Where ESMA rejects the request by the competent authority, it shall provide reasons therefor in writing.

The implementing act referred to in the first subparagraph of this paragraph shall be adopted in accordance with the procedure referred to in Article 86(3).

The suspension of the trading obligation referred to in paragraph 5 shall be valid for the same initial period.

The implementing act referred to in the first subparagraph of this paragraph shall be adopted in accordance with the procedure referred to in Article 86(3).

ESMA shall, in sufficient time before the end of the suspension period referred to in paragraph 7 of this Article or of the extension period referred to in the first subparagraph of this paragraph, issue an opinion to the Commission on whether the grounds for the suspension continue to apply. For the purposes of point (c) of the first subparagraph of paragraph 1 of this Article, ESMA shall consult the ESRB and the competent authorities designated in accordance with Article 22. ESMA shall send a copy of that opinion to the European Parliament and to the Council. That opinion shall not be made public.

The implementing act extending the suspension of the clearing obligation may also extend the period of the suspension of the trading obligation referred to in paragraph 7.

The extension of the suspension of the trading obligation shall be valid for the same period as the extension of the suspension of the clearing obligation.

Article 6b

Suspension of clearing obligation in the case of resolution

• (a) the CCP under resolution is authorised to clear the specific classes of OTC derivatives subject to the clearing obligation for which the suspension is requested; and

• (b) the suspension of the clearing obligation for those specific classes of OTC derivatives or for a specific type of counterparty is necessary to avoid or address a serious threat to financial stability or to the orderly functioning of financial markets in the Union in connection with the resolution of the CCP, and that suspension is proportionate to those aims.

The request referred to in the first subparagraph shall be accompanied by evidence that the conditions laid down in points (a) and (b) of that subparagraph are met.

The authority referred to in the first subparagraph shall notify its reasoned request to ESMA and the ESRB at the same time that the request is submitted to the Commission.

ESMA shall submit its reasoned request to the authority referred to in the first subparagraph of paragraph 1 and the ESRB at the same time the request is submitted to the Commission.

In adopting the implementing act referred to in the first subparagraph, the Commission shall take into account the opinion issued by ESMA referred to in paragraph 2 of this Article, the resolution objectives referred to in Article 21 of Regulation (EU) 2021/23, the criteria set out in Article 5(4) and (5) of this Regulation regarding those OTC derivative classes and the necessity of the suspension to avoid or address a serious threat to financial stability or the orderly functioning of financial markets in the Union.

Where the Commission rejects the requested suspension, it shall provide reasons therefor in writing to the requesting authority referred to in the first subparagraph of paragraph 1 and to ESMA. The Commission shall immediately inform the European Parliament and the Council thereof and forward them the reasons provided to the requesting authority referred to in the first subparagraph of paragraph 1 and to ESMA. Such information shall not be made public.

The implementing act referred to in the first subparagraph of this paragraph shall be adopted in accordance with the procedure referred to in Article 86(3).

The suspension of the trading obligation referred to in paragraph 6 shall be valid for the same initial period.

The implementing act referred to in the first subparagraph of this paragraph shall be adopted in accordance with the procedure referred to in Article 86(3).

The request shall be accompanied by evidence that the conditions laid down in points (a) and (b) of the first subparagraph of paragraph 1 continue to be met.

The authority referred to in the first subparagraph shall notify its reasoned request to ESMA and the ESRB at the same time that the request is notified to the Commission.

The request referred to in the first subparagraph shall not be made public.

ESMA shall without undue delay after the receipt of the notification of the request and, if it deems necessary, after consulting the ESRB, issue an opinion to the Commission on whether the grounds for the suspension continue to apply taking into account the necessity to avoid or address a serious threat to financial stability or the orderly functioning of financial markets in the Union, the resolution objectives laid down in Article 21 of Regulation (EU) 2021/23 and the criteria set out in Article 5(4) and (5) of this Regulation. ESMA shall send a copy of that opinion to the European Parliament and to the Council. That opinion shall not be made public.

The implementing act extending the suspension of the clearing obligation may also extend the period of the suspension of the trading obligation referred to in paragraph 6.

The extension of the suspension of the trading obligation shall be valid for the same period as the extension of the suspension of the clearing obligation.

Article 7

Access to a CCP

• (a) collateral requirements and netting of economically equivalent contracts, where the inclusion of such contracts in the close-out and other netting procedures of a CCP based on the applicable insolvency law would not endanger the smooth and orderly functioning, the validity or enforceability of such procedures; and

• (b) cross-margining with correlated contracts cleared by the same CCP under a risk model that complies with Article 41.

A CCP may require that a trading venue comply with the operational and technical requirements established by the CCP, including the risk-management requirements.

The competent authority of the trading venue and that of the CCP may refuse access to the CCP following a formal request by the trading venue only where such access would threaten the smooth and orderly functioning of the markets or would adversely affect systemic risk.

Article 7a

Active account

Where a financial counterparty or a non-financial counterparty becomes subject to the obligation to hold an active account in accordance with the first subparagraph, that financial counterparty or non-financial counterparty shall notify ESMA and its relevant competent authority thereof and shall establish such an active account within six months of becoming subject to that obligation.

• (a) the account is permanently functional, including with legal documentation, IT connectivity and internal processes associated to the account being in place;

• (b) the counterparty has systems and resources available to be operationally able to use the account, even at short notice, for large volumes of the derivative contracts referred to in paragraph 6 of this Article at all times and to be able to receive, in a short period of time, a large flow of transactions from positions held in a clearing service of substantial systemic importance pursuant to Article 25(2c);

• (c) all new trades of the respective counterparty in the derivative contracts referred to in paragraph 6 can be cleared in the account at all times;

• (d) the counterparty clears in the active account trades which are representative of the derivative contracts referred to in paragraph 6 of this Article that are cleared at a clearing service of substantial systemic importance pursuant to Article 25(2c) during the reference period.

• (a) the different classes of derivative contracts;

• (b) the maturity of the trades;

• (c) the trade sizes.

The representativeness obligation referred to in paragraph 3, point (d), shall not apply to counterparties with a notional clearing volume outstanding of less than EUR 6 billion in the derivative contracts referred to in paragraph 6.

The assessment of the representativeness obligation referred to in paragraph 3, point (d), shall be based on subcategories. For each class of derivative contracts, the number of subcategories shall result from the combination of the different sizes of the trades and the maturity ranges.

The requirements referred to in paragraph 3, points (a), (b) and (c), shall be fulfilled by the counterparty within six months of becoming subject to the obligation set out in paragraph 1 of this Article and that counterparty shall regularly report in accordance with Article 7b. The requirements shall be regularly stress-tested at least once a year.

For the representativeness obligation referred to in paragraph 3, point (d), to be fulfilled, counterparties shall clear, on annual average basis, at least five trades in each of the most relevant subcategories per class of derivative contracts and per reference period defined in accordance with paragraph 8, third subparagraph. Where the resulting number of trades exceeds half of the total trades of that counterparty for the preceding 12 months, the representativeness obligation referred to in paragraph 3, point (d), shall be considered fulfilled where that counterparty clears at least one trade in each of the most relevant subcategories per class of derivative contracts per reference period.

The representativeness obligation referred to in paragraph 3, point (d), shall not apply to the provision of client clearing services. The calculation of the notional clearing volume outstanding of a counterparty referred to in paragraph 8, fourth subparagraph, shall not include its client clearing activities.

• (a) interest rate derivatives denominated in euro or Polish zloty;

• (b) short-term interest rate derivatives denominated in euro.

In order to amend the list of contracts subject to active account obligations, ESMA, after consulting the ESRB and in agreement with the central banks of issue, shall submit to the Commission a thorough and comprehensive cost-benefit analysis, in line with the quantitative technical assessment specified in Article 25(2c), first subparagraph, point (c), as relevant, including effects on other Union currencies, and assessing the possible effects of extending the active account obligations to the new types of contracts, and an opinion in connection to this assessment. The agreement of the central banks of issue shall only relate to the contracts denominated in the currency that they issue.

Where ESMA undertakes the assessment and issues an opinion concluding that the list of contracts should be amended, the Commission is empowered to adopt a delegated act in accordance with Article 82 to amend the list of derivative contracts under the first subparagraph of this paragraph.