ESMA to recognise UK CCPs under EMIR regime 14 February 2019Brussels Reporter: Maddie Saghir
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In preparation for a no-deal Brexit, European Securities Markets Authority have started the process to recognise UK central clearing counterparties (CCPs) under the European Market Infrastructure Regulation (EMIR) third country regime.
This follows the temporary equivalence decision issued by the EU Commission in December last year, explained Steven Maijoor, chair of ESMA, during his speech at the European Financial Forum 2019 in Dublin.
Maijoor highlighted that the area of central clearing of derivatives is generally considered to be the securities markets area to entail the highest stability risks in the event of no-deal.
To respond to those possible risks to the stability of EU financial markets, ESMA identified the
need to ensure continued access to UK CCPs for EU clearing members and trading venues.
According to Maijoor, ESMA aims to adopt the recognition decisions well ahead of Brexit date, and so far, the recognition process has progressed without delay.
Meanwhile, non-centrally cleared over-the-counter derivatives in the event of a no-deal Brexit will not entail a stability risk that would need public intervention.
Maijoor said: 鈥淗owever, we will facilitate the repapering of contracts by avoiding that moving contracts from the UK to the EU27 would result in new margin requirements or a central clearing obligation.鈥�
鈥淭he relevant amended draft technical standards were submitted to the commission in December last year, and following their adoption by the commission, we now await the conclusion of the scrutiny period by EU Parliament and Council for them to enter into force.鈥�
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