ESMA extends recognition decisions for 3 UK CCPs in the event of a no-deal Brexit
The European Securities and Markets Authority (ESMA) has announced (on 23 December) that it has extended the recognition decisions for the three central counterparties (CCPs) established in the United Kingdom (UK) to reflect the extension of the expiry date of the Implementing Decision (EU) 2018/2031 of the European Commission on the equivalence of the UK CCP legal framework.
Recognisition of the 3 UK CCPs
ESMA announced on 18 February and 5 April 2019that in the event of a no-deal Brexit, it would recognise the three UK CCPs.
On 29 October 2019 the European Council took a decision in agreement with the United Kingdom to extend the period under Article 50(3) TEU.
Furthermore, on 19 December 2019 the European Commission adopted Implementing Decision (EU) 2019/2211 amending Implementing Decision (EU) 2018/2031. As a result, Implementing Decision (EU) 2018/2031 is now set to expire one year after the date referred to in the second paragraph of Article 2 of that Decision.
ESMA has consequently amended the recognition decisions for the three UK CCPs to extend them until this new expiry date.
The recognition decisions would take effect on the date following Brexit date, under a no-deal Brexit scenario.
ESMA’s mission is to enhance investor protection and promote stable and orderly financial markets.
It achieves these objectives through four activities:
-assessing risks to investors, markets and financial stability;
-completing a single rulebook for EU financial markets;
– promoting supervisory convergence; and
-directly supervising specific financial entities.
ESMA achieves its mission within the European System of Financial Supervision (ESFS) through active cooperation with the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), the European Systemic Risk Board, and with national authorities with competencies in securities markets (NCAs).