On June 15, ISDA and the European Banking Federation (EBF) submitted a response to ESMA’s consultation on post-trade risk reduction (PTTR). ISDA and the EBF stress that firms still have sizable bilateral portfolios and propose that transactions that are a result of PTRR should be allowed to remain uncleared, for derivatives transaction which would otherwise be subject to the clearing obligation (CO) under EMIR. In order to address concerns in relation to the potential risks of firms circumventing the CO, ISDA and the EBF propose strict conditions for administrative transactions resulting from PTRR. Therefore, PTRR should be performed by independent providers, there should be a requirement to prove that risk reduction exercises reduce the risk in each bilateral portfolio, and that each bilateral transaction resulting from PTRR exercises must be subject to an equal and opposite transaction facing a central counterparty.