ESMA specifies requirements to facilitate safe use of post-trade risk reduction services
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ESMA publishes its final report with the regulatory technical standards (RTS) setting the requirements for transactions resulting from post-trade risk reduction (PTRR) services, such as compression or portfolio rebalancing, to be exempt from the EMIR 3 clearing obligation. It includes safeguards against misuse of the exemption.
Key points
- Common conditions on market risk neutrality and risk reduction for compression, rebalancing and basis risk optimisation.
- Obligations for providers: transparency, algorithms, execution, controls, record-keeping and monitoring of the exemption.
- The final text is largely unchanged from the consultation and builds on existing market practice.
Who is affected
PTRR service providers (MiFID-authorised firms) and OTC derivatives counterparties subject to the clearing obligation.
Deadlines
Submitted to the Commission on 9 October 2026, which has three months to endorse the RTS.
Plain-language version
ESMA, the EU's stock market watchdog, has set conditions for safely using services that 'compress' or rebalance portfolios of derivatives, contracts whose value depends on another asset, to cut risk. Such trades can skip the clearing house, the middleman that guarantees payment, but with safeguards against abuse. The European Commission now has to approve it.
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Summary produced with artificial intelligence from the official publication. It may contain errors: always check the original document.
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