Members' Research Service By / March 16, 2023

Excessive and concentrated exposures to third-country central counterparties [EU Legislation in Progress]

On 7 December 2022, the Commission tabled two proposals to modify the current framework that applies to EU central clearing counterparties (CCPs) and market participants who use their services

© FireFly / Adobe Stock

Written by Issam Hallak (2nd edition, updated on 15.09.2023).

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 of 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). She tabled her draft reports in June 2023.


Proposal for a regulation amending Regulations (EU) No 648/2012, (EU) No 575/2013 and (EU) 2017/1131 as regards measures to mitigate excessive exposures to third-country central counterparties and improve the efficiency of Union clearing markets
Proposal for a directive amending Directives 2009/65/EU, 2013/36/EU and (EU) 2019/2034 as regards the treatment of concentration risk towards central counterparties and the counterparty risk on centrally cleared derivative transactions
Committee responsible:Economic and Monetary Affairs (ECON)COM(2022) 697
COM(2022) 698
Rapporteur:Danuta Maria Hübner (EPP, Poland)2022/0403(COD)
Shadow rapporteurs:Aurore Lalucq (S&D, France)
Erik Poulsen (Renew, Denmark)
Claude Gruffat (Greens/EFA, France)
Dorien Rookmaker (ECR, Netherlands)
Ordinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’)
Next steps expected: Vote in committee on draft report
EU Legislation in progress timeline

Related Articles

Leave a Reply

%d bloggers like this: