Circular on Clearing Through Central Counterparties (CCPs) under EMIR

The MFSA has released a circular, addressed to all market participants falling within the scope of European Market Infrastructure Regulation (“EMIR”), on the implications on Clearing Through Central Counterparties (“CCPs”) established in the UK should the UK be considered as a third-country jurisdiction under EMIR.

Should this be the case, as of the 29th of March 2019, any UK-based CCPs will be treated as third country CCPs and would require recognition by the European Securities and Markets Authority (ESMA) before offering clearing services to EU customers.

Prior to this, the European Commission must adopt an implementing act to ensure, amongst others, that the legal and supervisory frameworks of the relevant third country impose legally binding requirements equivalent to those found in Title IV of EMIR.

Cooperation arrangements must also be set up between the relevant third country authorities whose legal and supervisory frameworks are recognised as equivalent, and the ESMA.

Consultation and Feedback

With regards to the above, the MFSA anticipates potential risks and challenges for any stakeholders linked to UK-based CCPs and encourages such stakeholders to get in touch to discuss possible solutions for this eventuality. Should the stakeholders be in doubt as to whether they make use of UK-based CCPs or not, the MFSA recommends that they seek confirmations.

Stakeholders are encouraged to contact the Authority as soon as possible and preferably by not later than Friday 27th July 2018 on [email protected].

Please feel free to contact us should you have any queries on the above.