EMIR Active Account Requirement: ESMA’s First Effectiveness Report

ByOfficer

On 6 July 2026, the European Securities and Markets Authority (ESMA) published the first stage of its effectiveness assessment of the EMIR Active Account Requirement, together with the first annual report of the Joint Monitoring Mechanism. The rule applies to financial and non-financial EU counterparties that are subject to the EMIR clearing obligation and meet the Article 7a scope test for euro and Polish zloty interest rate derivatives or euro short-term interest rate derivatives. The EUR 6 billion threshold is relevant to the representativeness obligation, not to the whole active account obligation.

The Active Account Requirement (AAR) is the part of EMIR 3 that requires certain EU counterparties to maintain an active account at an EU CCP for specified euro and Polish zloty interest rate derivatives and euro short-term interest rate derivatives. ESMA is required to test whether it is working, and the 6 July documents are the first evidence it has set out. The interim report reads as cautious. Around 500 entities have notified, they cover more than 90 percent of the relevant EU notional, and account opening went smoothly. The movement of actual clearing away from the two systemically important UK central counterparties is real but small.

These findings matter because firms are about to file against the same framework. The first AAR reporting submission is expected on 31 July 2026, covering 25 June 2025 to 30 June 2026. Subsequent submissions are due on 31 January and 31 July each year, each covering a twelve-month reference period. The first complete set of AAR reporting data is expected in January 2027, and the 2027 assessment can trigger a Commission report and, where the Commission judges it appropriate, a legislative proposal. Reading the interim findings correctly now is what keeps a reporting build pointed the right way.

Related reading: EMIR 3 clearing obligation thresholds and the active account

The dates that anchor the AAR timeline

The AAR was picked for coverage because it is calendar-driven, and the interim report only makes sense against the sequence that produced it. The operative dates a clearing or reporting team should keep visible are these:

  • 24 December 2024: EMIR 3 (Regulation (EU) 2024/2987) entered into force.
  • 25 June 2025: end of the six-month window to establish a functional active account at an authorised EU CCP.
  • 19 June 2025: ESMA published the final regulatory technical standards specifying the AAR conditions.
  • 29 October 2025: the Commission adopted those standards as Commission Delegated Regulation (EU) 2026/305.
  • 6 February 2026: Delegated Regulation (EU) 2026/305 published in the Official Journal.
  • February 2026: JMM Industry Roundtable with CCPs, clearing members and clients.
  • 28 February 2026: reference date for the notifying-entity data (around 500 entities).
  • 31 July 2026: first AAR reporting submission expected from in-scope entities, covering 25 June 2025 to 30 June 2026.
  • 6 July 2026: ESMA publishes the interim effectiveness report and the first JMM annual report.
  • January 2027: first complete set of AAR reporting data expected to be available.
  • During 2027: the full AAR effectiveness assessment to be submitted to the European Parliament, the Council and the Commission.

Two reports, one legal mandate under Article 7a(10)

ESMA released two documents on the same day, and they answer different questions. The interim report is the effectiveness assessment. The JMM annual report is the monitoring record that feeds it. Keeping them separate avoids double counting the same finding twice.

The effectiveness mandate sits in Article 7a(10) of EMIR. It requires ESMA, in close cooperation with the European System of Central Banks and the European Systemic Risk Board and after consulting the JMM, to assess whether the AAR is mitigating the financial stability risk created by EU counterparties’ excessive exposures to Tier 2 CCPs whose services ESMA has identified as of substantial systemic importance under Article 25(2c). The three services ESMA identified in its December 2021 review were euro and Polish zloty interest rate derivatives at LCH Ltd, euro short-term interest rate derivatives at ICE Clear Europe, and euro credit default swaps at ICE Clear Europe. After ICE Clear Europe closed its credit default swap business in 2023, the AAR applies to OTC euro and Polish zloty interest rate derivatives and euro short-term interest rate derivatives.

ESMA has split the assessment into two stages, and the reason is the state of the data. The AAR reporting stream that will carry the granular numbers is not flowing yet, so the interim report leans on notifications, transaction data reported under Article 9 of EMIR, supervisory data from EU and Tier 2 CCPs where available, and the qualitative input from the February roundtable. The interim report is explicit that its findings are preliminary and do not prejudge the fuller 2027 assessment. Article 7a(10) required ESMA to assess the effectiveness of Article 7a by 25 June 2026, roughly a year and a half after EMIR 3’s entry into force. ESMA’s interim report states that the assessment is being conducted in two stages, with an interim report submitted in June 2026 and a fuller assessment to follow in 2027 once a more complete data set is available.

The JMM’s own remit is narrower and continuous. Under Article 23b of EMIR the mechanism monitors the implementation of the AAR at aggregate EU level, covering overall exposures to substantially systemic clearing services, developments in clearing at EU CCPs, and other shifts in clearing practices that affect EU CCPs. Its observers are national competent authorities and central banks, including the Commission de Surveillance du Secteur Financier for Luxembourg, De Nederlandsche Bank, the Deutsche Bundesbank and the Banque de France, with the European Commission attending as an observer.

Who has notified, and why 500 entities cover most of the market

The headline implementation number is around 500 notifying entities as of February 2026, belonging to 89 different groups. That count has stabilised since early 2026 after two visible jumps: one at the start of implementation and one after June 2025, when the six-month account window closed. The pattern suggests a large share of entities complied close to the end of that window, which is a normal filing rhythm for a hard deadline.

The number that changes how you read the coverage is different. Notifying entities are only about 25 percent of the roughly 2,000 EU entities active in AAR-relevant products, yet they hold more than 90 percent of both the gross and the absolute net notional held by EU entities. The framework is therefore capturing the bulk of the exposure while touching a minority of the population. The entities that have not notified are mostly smaller firms with limited activity in AAR-relevant products; the EUR 6 billion threshold governs the representativeness obligation for entities that have already notified, not who is required to notify in the first place.

Concentration is heavy. Around 60 percent of notifying entities sit in France, Germany and the Netherlands, and the JMM report puts specific numbers on it: 165 in France, 80 in Germany and 64 in the Netherlands. Banks account for roughly half of all notifications and dominate in notional terms: the Interim Report puts their share at over 80 percent of total gross notional outstanding, and the JMM Annual Report puts it at around 90 percent. Investment funds are the next meaningful sector by notional, while pension funds and insurance companies are numerous but smaller. The sector map has a geography of its own: most insurance and pension notifiers are Dutch, and around 70 percent of notifying investment funds are French.

Where teams misread this section is the leap from “500 entities” to “500 reporting builds of equal size.” Nearly two-thirds of notifiers exceed the EUR 6 billion threshold and are therefore in the population ESMA treats as subject to the representativeness obligation. In build terms, teams should still check the Article 7a(5) exemption for counterparties clearing at least 85 percent of the relevant derivative contracts at an authorised EU CCP. A firm below that threshold notifies and holds an account, but does not carry the same representativeness test. The population is not uniform, and treating it as uniform inflates the perceived burden for smaller notifiers and understates it for the largest banks.

A shift toward EU CCPs that is real but still limited

On impact, ESMA is measured. Transaction data shows an increase in clearing activity at EU CCPs by some notifying entities since December 2024, with the sharpest movement among smaller entities. Some of those firms relocated their positions to the EU in full after previously clearing only at Tier 2 CCPs. Larger entities, those above EUR 100 billion in outstanding notional, moved less, and the largest banks in particular keep substantial activity at Tier 2 CCPs.

At the market level, the picture is a slight shift in market share toward EU CCPs during 2025 measured in gross notional outstanding. The gains cluster in euro OTC interest rate derivatives, particularly euro forward rate agreements, and in Euribor short-term interest rate futures, where EU CCP activity roughly doubled but still sits near 10 percent. Euro STR short-term interest rate products and Polish zloty OTC interest rate derivatives stayed broadly flat. Tier 2 CCPs continue to dominate, in some products accounting for more than 90 percent of cleared volumes.

The risk proxy tells the same restrained story. The share of initial margin posted by EU clearing members at Tier 2 CCPs relative to EU CCPs fell from 58 percent in the fourth quarter of 2024 to 51 percent in the fourth quarter of 2025. ESMA attributes that fall mostly to higher margins at EU CCPs rather than to lower margins at Tier 2 CCPs, and flags that initial margin is a blunt instrument here. It is measured at clearing service level and can move for reasons unconnected to the AAR, such as CCP risk models, portfolio netting and general market conditions.

The misconception to guard against is the political one. A limited shift is easy to read as a signal that the requirement will be softened, and the interim report does not support that reading. ESMA frames the modest uptake as expected this early and states plainly that it remains to be seen whether excessive exposures to Tier 2 CCPs will decline further. The report measures where the market is, and leaves the question of whether the rule is calibrated correctly to the 2027 assessment.

The semi-annual EMIR Active Account Requirement report is now live

The interim report is a supervisory document, but it lands on top of an operational obligation that in-scope firms carry regardless of what the findings say. EMIR 3 introduced a reporting framework so that national competent authorities can monitor compliance with the AAR, and Commission Delegated Regulation (EU) 2026/305 specifies the operational conditions, the representativeness obligation and the reporting requirements. Non-exempt entities report semi-annually on their activities and risk exposures and provide a demonstration of compliance with the operational conditions. Entities that benefit from the Article 7a(5) 85 percent EU-CCP exemption are exempt from Article 7b reporting requirements, including representativeness reporting. The first AAR reporting submission for non-exempt entities is expected on 31 July 2026, covering 25 June 2025 to 30 June 2026.

The operational conditions are more than an account number. The account must be functional, which means legal documentation, IT connectivity and internal processes are in place, and it must be able to handle large volumes. Entities demonstrate that capacity through annual stress tests designed to show the account could absorb a rapid increase in clearing, for example if positions had to be moved from a third-country CCP into the EU at short notice. An account that exists on paper but could not take the flow does not meet the standard.

The representativeness obligation is the part most likely to be under-scoped. For entities above the EUR 6 billion threshold, EMIR 3 requires a minimum number of trades to be cleared through the active account so that it is not dormant, a requirement that survives even where Article 7a(5)’s 85 percent EU-CCP exemption applies. That exemption, available to counterparties that clear at least 85 percent of the relevant derivative contracts at an authorised EU CCP, does not remove the representativeness obligation under Article 7a(3)(d), but it exempts the counterparty from the operational-condition requirements in Article 7a(3)(a)-(c), the related stress-testing requirement in Article 7a(4), and the Article 7b reporting requirements, including reporting needed to demonstrate compliance with the representativeness obligation. ESMA identifies up to three derivative classes among the substantially systemic services and up to five relevant subcategories per class by size and maturity, and counterparties clear a minimum number of trades in each over the reference period, assessed on an annual average basis. A de minimis threshold reduces the count to one trade per subcategory instead of five for any counterparty whose five-trade requirement would exceed half of its total trades over the preceding twelve months. This de minimis is a general proportionality safeguard tied to a counterparty’s own trading volume, not an entity-type carve-out for pension schemes; EMIR 3’s recital 14 floated a one-trade scaled-down rule for pension scheme arrangements, but neither Article 7a(4) of EMIR nor the adopted Delegated Regulation (EU) 2026/305 enacts it, so pension scheme arrangements face the same general test as any other counterparty. The precise counts and reference periods are set out in the standards, and our companion note on ESMA’s Active Account Requirement reporting templates walks through how they map to the return.

The first time I reconciled an AAR notification against the reporting fields, the mismatch that stood out was scope. The notification is an entity-level flag to ESMA and the national competent authority that a firm is subject to the AAR. The semi-annual return under Delegated Regulation (EU) 2026/305 asks for activity, risk exposures and evidence that the operational conditions are met. A team that treats the notification as if it discharged the reporting obligation has closed the wrong item. For the Luxembourg reporting path specifically, the CSSF has set out how the active account obligation is handled locally, which we cover in our guide to EMIR active account reporting under the CSSF’s Article 7b guidance.

One further point on enforcement design, kept to what the text says: EMIR 3 requires Member States to provide for periodic penalty payments where a counterparty subject to the AAR fails to meet the operational conditions or the representativeness obligation. How any authority applies that is a matter for the authority, and nothing in the interim report speaks to individual cases.

What the Joint Monitoring Mechanism adds beyond the AAR

The JMM annual report repeats the AAR findings, because the JMM’s monitoring work is what produced them, but it also reaches past the AAR into the wider clearing picture. Three parts of it are worth a reporting team’s attention even though none of them create a new filing.

First, the report examines cross-border dependencies, with a focus on the United States. It confirms considerable interlinkage between EU and US cleared markets, which supports liquidity and risk sharing in normal times but can also carry shocks between the two systems. That framing is a reminder that the AAR addresses one specific dependency, on the two UK Tier 2 CCPs, and does not touch the broader web of exposures.

Second, the report takes stock of the trends affecting EU CCPs, including the expansion of asset classes and products cleared inside the Union. Third, it runs a stocktake of existing EU-wide stress tests to look for synergies across the clearing ecosystem, drawing on the ESRB’s conceptual framework for analysing the aggregate impact of the AAR and an ECB analysis of the euro short-term interest rate segment. These are analytical building blocks for the 2027 assessment, and they signal the metrics ESMA will want once the AAR reporting data arrives.

The JMM itself is a coordination mechanism among national competent authorities and central banks, not a new supervisor with its own reporting channel. The obligations that bind a firm still come from EMIR and the delegated regulation, and the data the JMM uses is drawn from existing sources, chiefly EMIR transaction data and the AAR notifications, supplemented by CCP supervisory data. Firms do not file to the JMM.

The decisions that still lie ahead in 2027

The interim report is candid about its own limits, and the gaps it names are the work programme for the next stage. Existing EMIR data covers only European Economic Area entities, so it does not fully capture the positions of third-country subsidiaries of EU groups. It also lacks account-level granularity and the risk sensitivities, such as PV01 or DV01, and default fund contributions that a fuller risk assessment needs.

ESMA’s next steps address those gaps in sequence. It will develop a dedicated methodology for the effectiveness assessment, supported where needed by a targeted data request, and that methodology will drive the second stage. The new AAR reporting framework is expected to fill much of the data gap as returns come in through the second half of 2026, with the first complete data set expected in January 2027. The full assessment, including an evaluation of any complementary measures, is expected to reach the European Parliament, the Council and the Commission during 2027.

The step that reporting teams should watch is what follows ESMA’s report. Under EMIR 3, once the Commission receives ESMA’s assessment it prepares its own report, which may be accompanied where appropriate by a legislative proposal. ESMA can also propose measures and quantitative thresholds with an impact assessment and a cost-benefit analysis. That is the channel through which the EUR 6 billion threshold, the class and subcategory selection, or the representativeness counts could change. None of that is on the table in the interim report, and reading a recalibration into the July 2026 findings gets the sequence wrong.

For anyone standing up or reviewing an EMIR reporting stack, the interim report changes the priority order while the obligations stay put. The account and the semi-annual return are live now. The interpretive questions, and the possibility of calibration, belong to 2027. Our EMIR reporting guide sets out how the Article 9 transaction data that ESMA is leaning on in the interim report fits alongside the AAR-specific return.

Frequently Asked Questions

Does the interim report change what in-scope firms have to file?

No. The interim report is ESMA’s own assessment under Article 7a(10). It does not amend Delegated Regulation (EU) 2026/305 or the reporting obligations. In-scope entities still open a functional active account, meet the representativeness obligation if above the EUR 6 billion threshold, and file the semi-annual AAR report, with the first return expected on 31 July 2026.

Why was the report published in July 2026 instead of June?

Article 7a(10) of EMIR set 25 June 2026, roughly a year and a half after EMIR 3’s entry into force on 24 December 2024, as the date by which ESMA had to assess the effectiveness of Article 7a. ESMA published the interim report on 6 July 2026. The report describes this as the first of two stages and states that an interim report was submitted in June 2026, with a fuller assessment following in 2027 once AAR reporting data is available.

What counts as an AAR-relevant product now?

After ICE Clear Europe closed its euro credit default swap business in 2023, the AAR applies to OTC interest rate derivatives denominated in euro and Polish zloty and to short-term interest rate derivatives denominated in euro. The euro CDS leg identified in ESMA’s 2021 systemic-importance review is no longer part of the live requirement.

We notified ESMA in 2025. Is anything else outstanding?

Notification is a separate step from reporting. If the entity is above the EUR 6 billion threshold it also carries the representativeness obligation, which survives even where the Article 7a(5) exemption for counterparties clearing at least 85 percent of the relevant derivative contracts at an authorised EU CCP applies. However, ESMA’s Q&A states that entities benefiting from that exemption are exempt from Article 7b reporting requirements, including reporting needed to demonstrate compliance with the representativeness obligation. For non-exempt entities, the semi-annual return under Delegated Regulation (EU) 2026/305 reports activity, risk exposures and a demonstration of compliance. A notification on file does not close the reporting obligation for those non-exempt entities.

Does the limited shift away from Tier 2 CCPs mean the AAR will be relaxed?

No. The interim report records a modest, still-limited uptake of EU clearing and states that it remains to be seen whether exposures to Tier 2 CCPs will fall further. Any recalibration of the threshold, product classes or representativeness counts would come through the 2027 assessment and a possible Commission report, not from the July 2026 findings.

Do we report anything to the Joint Monitoring Mechanism?

No. The JMM is a coordination mechanism under Article 23b of EMIR. Article 7b reporting is submitted to the competent authority, which then transmits the information to ESMA without undue delay. Article 7a notifications are made to ESMA and the relevant competent authority. Firms do not file reports to the JMM.

What should we do with the January 2027 data milestone?

ESMA expects the first complete set of AAR reporting data in January 2027, which is what enables the fuller assessment. For a reporting team, that milestone is a data-quality checkpoint: the returns filed from 31 July 2026 onward are the inputs to that data set, so field-level accuracy on activity, risk exposures and operational-condition evidence in the first cycles carries into the 2027 review.

Related Articles

Key Takeaways

  • ESMA published the first stage of its EMIR Active Account Requirement effectiveness assessment on 6 July 2026, alongside the first JMM annual report. The findings are preliminary and do not prejudge the fuller 2027 assessment.
  • Around 500 entities across 89 groups had notified by February 2026. They are only about 25 percent of active EU entities but hold more than 90 percent of the relevant EU notional.
  • Notifications concentrate in France, Germany and the Netherlands, and banks account for roughly half of them and more than 80 percent of the notional (the JMM Annual Report puts it nearer 90 percent).
  • The shift of clearing toward EU CCPs is real but limited, mainly in euro forward rate agreements and Euribor futures. Tier 2 CCPs still dominate, above 90 percent of cleared volumes in some products.
  • The initial margin share at Tier 2 CCPs relative to EU CCPs fell from 58 percent to 51 percent across 2025, driven by higher margins at EU CCPs.
  • The operational obligations are live now: a functional active account, an EUR 6 billion-threshold representativeness obligation that survives the Article 7a(5) 85 percent EU-CCP exemption, annual stress tests for counterparties outside that exemption, and the first AAR reporting submission expected on 31 July 2026.
  • The first complete AAR data set is expected in January 2027, feeding the full assessment that goes to the European Parliament, Council and Commission during 2027 and could lead to a Commission report and a possible legislative proposal.

Sources and References

Reading the interim report without over-reading it

The interim report is a status check: account implementation is in place for the notified population, market coverage is high, and the observed behavioural change is still early and modest. The mistake a reporting team can make is to treat a supervisory scorecard as a change to their obligations. Nothing in the 6 July 2026 documents alters the account, the representativeness obligation or the semi-annual return. What they do is set the agenda for 2027, when the reporting data ESMA is still waiting for will decide whether the AAR is left as it is or recalibrated. The filings your team makes from 31 July 2026 onward are the raw material for that decision, which is the strongest reason to get the first cycles right.

Last updated: July 2026

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