EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012). The Decision (2020/1308) shall enter into force on the day following that of its publication in the Official Journal of the European Union. The Decision shall apply from January 01, 2021 and expire on June 30, 2022. In a separate statement, BoE welcomed the adoption of this equivalence decision on the future UK legal and supervisory framework for central counterparties.
BoE states that this decision will allow European authorities to finalize the remaining steps for recognition of UK central counterparties. This will enable UK central counterparties to continue to provide clearing services to their EU members and EU banks to continue meet their obligations to UK central counterparties. In the UK, HM Treasury and BoE have already put in place a temporary recognition regime for non-UK central counterparties. From January 01, 2021, this will enable EU central counterparties to continue to provide services in the UK. As part of the recognition process, BoE and ESMA have agreed on an updated Memoranda of Understanding regarding cooperation and information-sharing arrangements with respect to central counterparties. The MoU also takes effect from January 01, 2021.
The EC decision is intended to give financial market participants 18 months to reduce their exposure to UK central counterparties. The heavy reliance of the EU financial system on services provided by UK-based central counterparties raises important issues related to financial stability and requires the scaling down of EU exposures to these infrastructures. Therefore, EC strongly encourages the industry to work together in developing strategies that will reduce their reliance on UK central counterparties that are systemically important for EU. On January 01, 2021, UK will leave the Single Market and this temporary equivalence decision is intended to protect financial stability in EU.
Keywords: Europe, EU, UK, Banking, Securities, Brexit, CCPs, OTC Derivatives, Systemic Risk, Equivalence Regime, EMIR, Decision 2020/1308
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.