Industry associations urge ESMA to issue a no-action letter on EMIR 3 AAR implementation

Four industry associations—EFAMA, EACP, ISDA, and FIA—have published a letter addressed to the European Securities and Markets Authority (ESMA) and the European Commission (EC), raising concerns about the implementation of the active account requirement (AAR) under EMIR 3, set to take effect on 24 June. The associations emphasised the importance for the final level 2 regulatory technical standards (RTS) on the conditions of the AAR to be published in the Official Journal of the European Union before the AAR becomes applicable. Without the RTS, EU financial market participants would not be able to understand the requirements that need to be complied with on day 1.

The letter states that proceeding with the AAR without finalised RTS would infringe on two key EU principles: (i) legal certainty, which requires rules that impact market participants′ rights and obligations to be clear, precise and predictable; and (ii) proportionality, which mandates that regulatory burdens be appropriate and necessary to achieve intended policy objectives. The letter further explains that the complexity is also compounded by ESMA's recent request for additional clarification from the EC on level 1 rules, which highlight ongoing uncertainty. As a result, the associations call for ESMA to issue an opinion or a no-action letter to national competent authorities, advising against prioritising supervisory or enforcement actions related to the AAR until the final RTS are officially adopted and published.

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