ESMA publishes a supervisory briefing on the AAR representativeness obligation

Key dates

26 February 2026

- AAR RTS enter into force (20 days after Official Journal publication on 6 February 2026)

31 July 2026 Deadline

- First EMIR 3 representativeness reporting deadline

31 January 2027 Deadline

- First AAR compliance report due

Suggested considerations

• *Immediate (by 26 February 2026):
• Review the ESMA supervisory briefing and Commission Delegated Regulation (EU) 2026/305 in detail
• Assess whether your firm meets the €6 billion notional clearing volume outstanding threshold triggering AAR obligations
• Identify internal teams responsible for AAR compliance (trading, operations, compliance, reporting)
• *Short-term (by 31 July 2026):
• Establish systems to continuously monitor and identify the five most relevant subcategories for each derivative class

What changed

The supervisory briefing addresses three core compliance areas: Identifying Most Relevant Subcategories: Counterparties must continuously identify the five most relevant subcategories for each class of derivatives over each reference period, based on their trading activity. The guidance clarifies that the number of subcategories to select equals the maximum number available for that derivative class. Representativeness Compliance Standard: Counterparties must clear, on an annual average basis, at least five trades in each of the most relevant subcategories per class of derivative contracts per reference period. This annual averaging approach—rather than continuous monitoring—represents a significant clarification that reduces compliance complexity. Reporting Requirements: The briefing e

Who is affected

• *Primary: EU counterparties subject to the AAR with notional clearing volume outstanding at or exceeding €6 billion. This includes major investment banks, asset managers, hedge funds, and other significant derivatives market participants.
• *Secondary: National Competent Authorities (NCAs) supervising these entities, who are expected to apply this guidance when assessing compliance. EU CCPs must also ensure their systems support counterparties' compliance reporting.
• *Tertiary: Tier 2 CCP participants whose activity patterns inform the "most relevant subcategories" determination.

Related regulations

• *Industry Concerns and Clarification Requests
• Frequency of Subcategory Determination
• Threshold Crossing Mid-Period
• Compliance Period Alignment
• *Regulatory Technical Standards Publication
• *CCP Operational Readiness