Excessive and concentrated exposures to third-country central counterparties

On 7 December 2022, the European Commission made two proposals to amend EU legislation on derivative markets to reduce the excessive and concentrated exposure of EU financial institutions to third-country central counterparties (CCPs). CCPs are clearing platforms that mitigate counterparty risks on derivative instruments by demanding collateral. Among other things, the proposals would require EU financial institutions to retain a portion of mandatory CCP derivative trading, to be handled through EU CCPs, and aim to reduce the regulatory costs for innovation for the latter. The regulations would also grant other non-banking institutions further access to EU CCPs. The strategy behind the proposals is to establish additional controls over clearing in third-country CCPs posing systemic risks, while making EU CCPs more attractive. In Parliament, the Committee on Economic and Monetary Affairs (ECON) is responsible for the files. The rapporteur for the files is Danuta Hübner (Poland, EPP). First edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.