EC Deems UK Framework for CCPs Temporarily Equivalent to EMIR Rules
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.
Related Links
Keywords: Europe, EU, UK, Banking, Securities, Brexit, CCPs, OTC Derivatives, Systemic Risk, Equivalence Regime, EMIR, Decision 2020/1308
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
APRA Decides to Standardize Submission Date for Quarterly Reporting
APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.
EBA Publishes Phase 1 of Reporting Framework 3.1
EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).
UK Government to Set Out Rules on Wind-down of Critical Benchmarks
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA Launches Stress Test for Insurance Sector in EU
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK Authorities Publish Third Edition of Regulatory Initiatives Grid
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC Consults on Regulation on Non-Financial Sustainability Disclosures
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI Outlines Prudential Policy Priorities for Coming Months
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
BIS Announces TechSprint on Innovative Green Finance Solutions
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR Publishes Version 1.0.0 of RUBA Taxonomy
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA Proposed Regulatory Standards for Central Database on AML/CFT
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
