Article 85 Reports and review

1. By 25 December 2029 the Commission shall assess the application of this Regulation and prepare a general report. The Commission shall submit that report to the European Parliament and to the Council, together with any appropriate proposals.

1a. By 17 June 2023 ESMA shall submit a report to the Commission on the following:

(a) the impact of Regulation (EU) 2019/834 of the European Parliament and of the Council on the level of clearing by financial and non-financial counterparties and on the distribution of clearing within each type of counterparty, in particular with regard to financial counterparties that have a limited volume of activity in OTC derivatives and with regard to the appropriateness of the clearing thresholds referred to in Article 10(4);

(b) the impact of Regulation (EU) 2019/834 on the quality and accessibility of the data reported to trade repositories, as well as the quality of the information made available by trade repositories;

(c) the changes to the reporting framework, including the take-up and implementation of delegated reporting as laid down in Article 9(1a) and in particular its impact on the reporting burden for non-financial counterparties that are not subject to the clearing obligation;

(d) the accessibility of clearing services, in particular whether the requirement to provide clearing services, directly or indirectly, under fair, reasonable, non-discriminatory and transparent commercial terms referred to in Article 4(3a) has been effective in facilitating access to clearing.

3. By 18 December 2020 the Commission shall prepare a report assessing:

(a) whether the obligations to report transactions under Article 26 of Regulation (EU) No 600/2014 and under this Regulation create a duplicative transaction reporting obligation for non-OTC derivatives and whether reporting of non-OTC transactions could be reduced or simplified for all counterparties without undue loss of information;

(b) the necessity and appropriateness of aligning the trading obligation for derivatives under Regulation (EU) No 600/2014 with changes made under Regulation (EU) 2019/834 to the clearing obligation for derivatives, in particular to the scope of the entities that are subject to the clearing obligation;

(c) whether any trades that directly result from post-trade risk reduction services, including portfolio compression, should be exempted from the clearing obligation referred to in Article 4(1), taking into account the extent to which those services mitigate risk, in particular counterparty credit risk and operational risk, the potential for circumvention of the clearing obligation and the potential disincentive to central clearing.

The Commission shall submit the report referred to in the first subparagraph to the European Parliament and to the Council, together with any appropriate proposals.

3a. By 18 May 2020, ESMA shall submit a report to the Commission. That report shall assess:

(a) the consistency of the reporting requirements for non-OTC derivatives under Regulation (EU) No 600/2014 and under Article 9 of this Regulation, both in terms of the details of the derivative contracts that are to be reported and access to data by the relevant entities and whether those requirements should be aligned;

(b) the feasibility of further simplifying the reporting chains for all counterparties, including for all indirect clients, taking into account the need for timely reporting and taking into account the measures adopted pursuant to Article 4(4) of this Regulation and Article 30(2) of Regulation (EU) No 600/2014;

(c) the alignment of the trading obligation for derivatives under Regulation (EU) No 600/2014 with changes made under Regulation (EU) 2019/834 to the clearing obligation for derivatives, in particular to the scope of the entities that are subject to the clearing obligation;

(d) in cooperation with the ESRB, whether any trades that directly result from post-trade risk reduction services, including portfolio compression, should be exempted from the clearing obligation referred to in Article 4(1); that report shall:

(i) investigate portfolio compression and other available non-price forming post-trade risk reduction services which reduce non-market risks in derivatives portfolios without changing the market risk of the portfolios, such as rebalancing transactions;

(ii) explain the purposes and functioning of such post-trade risk reduction services, the extent to which they mitigate risk, in particular counterparty credit risk and operational risk, and assess the need to clear such trades or to exempt them from clearing, in order to manage systemic risk; and

(iii) assess to what extent any exemption from the clearing obligation for such services discourages central clearing and may lead to counterparties circumventing the clearing obligation;

(e) whether the list of financial instruments that are considered highly liquid with minimal market and credit risk, in accordance with Article 47, could be extended and whether that list could include one or more money market funds authorised in accordance with Regulation (EU) 2017/1131 of the European Parliament and of the Council.

5. ESMA shall present an annual report to the European Parliament, the Council and the Commission on the penalties imposed by competent authorities, including supervisory measures, fines and periodic penalty payments.

6. ESMA shall, in cooperation with the ESRB and in agreement with, in accordance with Article 24b(3), the central banks of issue of all Union currencies of the financial instruments cleared or to be cleared by the third-country CCP to which the implementing act referred to in the second subparagraph of Article 25(2c) is addressed, submit a report to the Commission on the application of the provisions of that implementing act, in particular assessing whether the financial stability risk for the Union or for one or more of its Member States is sufficiently mitigated. ESMA shall submit its report to the Commission within 12 months of the end of the adaptation period determined in accordance with point (b) of the fourth subparagraph of Article 25(2c). The agreement of a central bank of issue shall only relate to the currency it issues and not to the report as a whole.

Within 12 months of transmission of the report referred to in the first subparagraph, the Commission shall prepare a report on the application of the provisions of that implementing act. The Commission shall submit its report to the European Parliament and to the Council, together with any appropriate proposals.

7. By 25 December 2026 ESMA shall submit a report to the Commission on the possibility and feasibility to require the segregation of accounts across the clearing chain of non-financial and financial counterparties. The report shall be accompanied by a cost-benefit analysis.

8. By 25 December 2026, ESMA shall submit a report to the European Parliament, to the Council and to the Commission on the appropriateness and implications of extending the definition of a CCP, as referred to in Article 2, point (1), of this Regulation, to other markets beyond financial markets, such as commodity markets, including wholesale energy markets, or markets in crypto-assets under Regulation (EU) 2023/1114 of the European Parliament and Council.

9. By 25 December 2026, the Commission shall submit a report to the European Parliament and the Council assessing level playing field and financial stability considerations in relation to generalised central bank access for Union CCPs without the condition of maintaining a banking licence. In that context, the Commission shall also take into consideration the situation in third-country jurisdictions.

10. By 25 December 2027, ESMA shall submit a report to the European Parliament, the Council and the Commission on the overall activity in derivative transactions of financial counterparties and non-financial counterparties subject to this Regulation, providing, inter alia, the following information on those financial counterparties and non-financial counterparties, differentiating between their financial or non-financial nature:

(a) the potential risks to the financial stability of the Union that may arise from that type of activity;

(b) the positions in OTC commodity derivatives in excess of EUR 1 billion, specifying the exact amount of the positions concerned;

(c) the total volume of energy derivative contracts traded, distinguishing, where relevant, between those energy derivative contracts traded that are used for hedging and those energy derivative contracts traded that are not used for hedging;

(d) the total volume of agricultural derivative contracts traded, distinguishing, where relevant, between those agricultural derivative contracts traded that are used for hedging and those agricultural derivative contracts traded that are not used for hedging;

(e) the share of OTC and exchange-traded energy or agriculture derivative contracts that are physically settled in the total volume of energy derivative contracts or agriculture derivative contracts traded.

11. By 25 December 2026, ESMA, in cooperation with the ESRB, shall submit a report to the Commission. The report shall:

(a) define in detail the notion of procyclicality in the context of Article 41 for margins called by a CCP and Article 46 for haircuts applied to collateral held by a CCP;

(b) assess how the anti-procyclicality provisions of this Regulation and Commission Delegated Regulation (EU) No 153/2013 (**) have been applied over the years and whether further measures are necessary to improve the use of anti-procyclicality tools;

c) inform on how anti-procyclicality tools could or could not result in margin increases that would be greater than without the application of said tools, taking into account the potential add-ons or offsets that a CCP is allowed to apply under this Regulation.

In preparing the report, ESMA shall also assess the rules applying to, and the practices of, third-country CCPs, as well as international developments concerning procyclicality.

12. By 25 December 2027, ESMA shall, in close cooperation with the ESRB and the Joint Monitoring Mechanism, assess how Articles 15a, 17, 17a, 17b, 49 and 49a have been applied.

In particular, that assessment shall establish:

(a) whether the changes introduced by Regulation (EU) 2024/2987 of the European Parliament and of the Council (***) have obtained the desired effect with respect to increasing the competitiveness of Union CCPs and reducing the regulatory burden they face;

(b) whether the changes introduced by Regulation (EU) 2024/2987 have reduced the time to market for new clearing services and products without negatively impacting the risk for the CCPs, their clearing members or their clients;

(c) whether the introduction of the possibility for CCPs to implement directly changes as referred to in Article 15a has negatively impacted their risk profile or has increased the overall financial stability risks for the Union, and whether that possibility should be amended.

ESMA shall submit a report on the outcome of that assessment to the European Parliament, the Council and the Commission.

13. By 25 December 2026 ESMA shall submit a report to the Commission on whether the amendments to Article 9 introduced by Regulation (EU) 2024/2987 have resulted in a sufficiently clear improvement in the conduct of ESMA’s tasks and whether they have had an excessive negative impact on market participants. The report shall be accompanied by a cost-benefit analysis.

14. By 25 December 2028, ESMA shall submit a report to the Commission. That report shall, in cooperation with the ESRB, assess whether:

(a) PTRR services should be considered systemically important;

(b) the provision of PTRR services by PTRR service providers has resulted in an increased risk for the Union financial ecosystem; and

Within 18 months of transmission of the report referred to in the first subparagraph, the Commission shall prepare a report on the aspects presented by ESMA in its report. The Commission shall submit its report to the European Parliament and to the Council, together with any appropriate proposals.