ESMA Sets Conditions for Post-Trade Risk Reduction Exemption Under EMIR 3

The European Securities and Markets Authority (ESMA) has set out requirements for providers and users of post-trade risk reduction (PTRR) services seeking to use an exemption from the clearing obligation for certain over-the-counter (OTC) derivative transactions under EMIR 3. The rules are intended to make the exemption available under defined conditions while guarding against its misuse. ESMA’s final report specifies what information providers must give participants, how PTRR exercises should be conducted, and the controls providers should maintain. It also addresses record-keeping and how use of the clearing exemption will be monitored. PTRR services help market participants manage derivatives portfolios and reduce risk. The rules build on existing market practices. ESMA said it sought to avoid adding requirements where existing rules already meet the relevant objectives, in line with its simplification and burden-reduction aims. The framework is intended to support use of PTRR services while preserving the conditions attached to the EMIR 3 exemption. ESMA will submit the draft Regulatory Technical Standards to the European Commission for endorsement under the standard review process. The report is dated 20 October 2026.