EMIR – Active account requirement

Operational obligations

There are several operational obligations associated with the active account, including being (1) permanently functional, with all necessary legal documentation, IT connections and internal processes, (2) operationally capable of handling large volumes of transactions through the active account at short notice, and (3) able to clear all new transactions in the relevant derivatives classes through the active account at any time.

Representativeness obligation

The active account requirement also includes a representativeness obligation. Counterparties with less than €6 billion in cleared notional value are exempted from this obligation. For those institutions that are subject to the representativeness obligation, the transactions cleared through the active account must contain a representative minimum of the derivatives portfolio.

Reporting obligations

Institutions subject to the active account requirement must report periodically to the designated national competent authority (DNB or the AFM), which then forwards this information to ESMA. Every six months, these institutions must:

• Report on the activities and risks within the relevant derivatives classes.
• Confirm that the legal documentation, IT connections and internal processes for the active account are operational. 
• if clearing also takes place at a non-EU CCP (Tier 2 CCP), additional reporting requirements on operational systems and resources apply. 

Clearing members and customers trading through a non-EU CCP recognised under Article 25 of EMIR must report annually on their clearing activities. Individual counterparties that are not subject to consolidated supervision in the EU must report to the national compentent authority (DNB or the AFM). Consolidated counterparties report to the national competent authority through their parent company. Reports must cover the following:

• The type of financial and non-financial instruments cleared.
• Average cleared volumes per year, by EU currency and asset class
• The margins used and contributions to the default fund.
• The largest payment obligations within the clearing activities. 

The national competent authorities will forward this information to ESMA and the Joint Monitoring Mechanism.