On 26 March 2020, the European Securities and Markets Authority (ESMA) launched a public consultation on post trade risk reduction services (PTRR) under the European Market Infrastructure Regulation (EMIR).

ESMA is mandated to provide a final report to the European Commission, in cooperation with the European Systemic Risk Board, on whether any trades that directly result from PTRR services, including portfolio compression, should be exempted from the clearing obligation referred to in Article 4(1) of EMIR. As input for the final report, ESMA is looking into the different types of PTRR services being offered, their purpose and whether there is a need for the new trades that these may generate to be exempted from the clearing obligation, and if such an exemption could lead to the risk of some counterparties circumventing the clearing obligation.

ESMA will consider all comments received by 15 June 2020 and expects to publish a final report and to submit it to the European Commission.