# ESMA Sets Conditions for Derivatives Clearing Exemption Under EMIR 3

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/35943
Published: 2026-10-20T20:26:05.000Z
Updated: 2026-10-20T20:26:05.000Z
Section: Regulation

> Draft standards cover provider controls, recordkeeping and monitoring of the exemption.

The European Securities and Markets Authority (ESMA) on Oct. 20 set out proposed conditions for exempting certain over-the-counter derivatives transactions from mandatory clearing under EMIR 3, with safeguards intended to prevent misuse.

The exemption concerns post-trade risk reduction services, which help market participants manage risk in their derivatives portfolios. Providers and users would have to meet the conditions for transactions to qualify.

ESMA’s final report contains draft regulatory technical standards covering the information providers give participants, how risk-reduction exercises are conducted, provider controls and recordkeeping. The standards also describe how use of the exemption would be monitored.

The safeguards are intended to allow qualifying transactions to avoid mandatory clearing while keeping firms from using the services to sidestep the broader requirement. ESMA based the requirements on existing market practices and sought to avoid adding obligations where current rules already meet the same objectives.

The draft standards will be submitted to the European Commission for endorsement.