EMIR 3.0: Understanding the New Clearing Threshold (CT) Regime

As a continuation of our blog series, this post explores one of the most critical elements under review — the clearing threshold (CT) regime. On 8 April 2025, ESMA published a Consultation Paper (CP) proposing amendments to Regulation (EU) 149/2013, which significantly reshape the way clearing thresholds are calculated under EMIR.

While our previous blog covered the Active Account Obligation (AAO), this blog focuses on the threshold mechanics themselves — what’s changing, how it impacts counterparties, and what firms should do to prepare.

Recap: How Clearing Thresholds Work Today

Under current EMIR rules, counterparties assess their OTC derivatives exposure across asset classes by calculating the aggregate month-end average notional position over the previous 12 months. This means Financial Counterparties (FCs) and Non-Financial Counterparties (NFCs) are directly subject to the requirement to make a clearing threshold calculation.

There are four categories of counterparties:

FC+ – Financial Counterparty above the threshold
FC- – Financial Counterparty below the threshold (Small FC)
NFC+ – Non-Financial Counterparty above the threshold
NFC- – Non-Financial Counterparty below the threshold

Crossing the threshold as a + entity results in mandatory clearing obligations and additional margin/risk mitigation requirements.

Current EMIR Clearing Thresholds:

Asset Class	Threshold
Credit Derivatives	EUR 1 billion
Equity Derivatives	EUR 1 billion
Interest Rate Derivatives	EUR 3 billion
Foreign Exchange Derivatives	EUR 3 billion
Commodity & Other Derivatives	EUR 4 billion

Current Calculations – FCs vs NFCs

Financial Counterparties (FCs):

Must calculate group-wide exposure across all OTC derivatives (including hedging activity).
If any single asset class breaches the threshold, the entire OTC portfolio must be cleared.
Firms have 4 months from regulatory notification to begin clearing.

Non-Financial Counterparties (NFCs):

Also calculate on a group-wide basis, but can exclude trades that are objectively measurable as hedging.
If a threshold is breached in one asset class, only trades in that class are subject to clearing.
Same 4-month clearing implementation window applies.

What ESMA Proposes Under EMIR 3.0?

ESMA’s consultation introduces new thresholds and updated calculation logic, with the goal of better aligning risk profiles to clearing obligations.

For Financial Counterparties:

Two distinct calculations:

FCs must calculate on a group basis including all Uncleared OTC derivatives entered both by it or other entities within its group.
FCs must calculate its aggregate positions in ALL OTC derivatives including uncleared and cleared trades.

➡️ If either calculation breaches the threshold in any asset class, the FC must clear all products subject to mandatory clearing.

For Non-Financial Counterparties:

One calculation only:

NFCs must calculate on an Entity basis all uncleared derivative excluding OTC derivative contracts that are objectively measurable as reducing risks directly related to the commercial activity or treasury financing activity of the NFC or its group (i.e., the hedging exemption).

➡️ If a threshold is breached, the NFC must clear only that asset class.

Proposed Thresholds for Uncleared OTC Derivatives (FCs and NFCs):

Asset Class	Proposed Threshold
Credit Derivatives	EUR 0.7 billion
Equity Derivatives	EUR 0.7 billion
Interest Rate Derivatives	EUR 1.8 billion
Foreign Exchange Derivatives	EUR 3 billion
Commodity & Other Derivatives	EUR 3 billion

Additional FC Calculation – Cleared + Uncleared:

With regards to the CT calculation for FCs, ESMA proposes to apply this to only asset classes where, currently, the mandatory clearing obligation applies to some of the products falling within those classes i.e. Interest Rate Derivatives and Credit Derivatives. As the calculation includes both cleared and uncleared positions, at group level, the current thresholds remain the same.

Asset Class	Threshold (Unchanged)
Interest Rate Derivatives	EUR 3 billion
Credit Derivatives	EUR 1 billion

Challenges: Brexit Divergence and Regulatory Inconsistencies

The EU has not granted UK venue equivalence, so EU firms must treat trades executed on UK venues as OTC, and include them in CT calculations.

Conversely, the UK has granted EU venue equivalence, meaning UK firms exclude EU venue trades from their threshold calculations.

This mismatch could:

Create different EMIR obligations for the same firm across jurisdictions
Require clearing in one region but not the other
Trigger classification and margin mismatches

RegEdge is monitoring UK developments closely to assess harmonization prospects.

What Firms Should Do Now

Review ESMA’s CP to better understand what your firms need and establish if our help is needed. (consultation closes 16 June 2025).
Inventory all group entities and ensure your system architecture stores all entities within your group categorized by FC/NFC.
Establish processes to map trading activity to clearable OTC products.
Automate monthly calculations across asset classes. Note: As the calculations are carried out based on values for the preceding 12 months, both FCs and NFCs should ensure that they collect the data they will need to run the calculations on the new EMIR 3 basis.
Build a control and governance framework for threshold ownership, oversight with clear roles and responsibilities.
Use exemptions (e.g., intragroup trades) strategically where permitted

How RegEdge Can Help

Our team supports firms in:

Performing Clearing Threshold (CT) calculations at group and entity level
Designing automated threshold monitoring and breach detection tools
Advising on EMIR 3.0 clearing strategy and exemption use
Assessing UK/EU divergence and managing cross-border implications

RegEdge is here to help you navigate this journey—practically, pragmatically, and with precision. If you would like to discuss the CT requirement, control framework, risk mitigation techniques or any other aspect of EMIR 3.0 with us, please do get in touch..