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The derivatives industry is expressing significant relief following the finalization of new European Union derivatives regulations. Bill Stenning, head of public affairs at Societe Generale, stated that the European Securities and Markets Authority (ESMA) “has clearly taken extensive and fairly robust industry feedback onboard to revise its approach, which has been very well received by us and others affected by the rules.” He added, “It’s good to see we’ve ended up in a reasonable place.”
These regulations have been a source of anxiety for years due to their complexity and the aim to bring more euro derivatives clearing activity within the EU. The industry’s positive reaction suggests that ESMA has successfully navigated the challenging process of incorporating feedback and producing a workable framework.
Recent developments in EU derivatives regulation include ESMA’s final report on the conditions of the Active Account Requirement (AAR) and ongoing efforts to clarify and harmonize reporting requirements under EMIR REFIT. The AAR aims to address financial stability risks by requiring certain financial and non-financial counterparties to hold an active account at an EU Central Counterparty (CCP) and clear a representative number of derivative contracts through it. This demonstrates the EU’s continued focus on strengthening its clearing landscape and reducing reliance on third-country CCPs, a sentiment that was amplified following Brexit.
While the new regulations are generally well-received, the derivatives market continues to face a landscape of ongoing regulatory transformation. Firms are constantly adapting to new requirements, leveraging technology for compliance, and navigating a degree of divergence between EU and UK regulatory approaches post-Brexit. The emphasis remains on improving market transparency, reducing systemic risk, and preventing market abuse.

Video courtesy of Eurex

Video courtesy of Eurex