Today, the European Securities and Markets Authority (ESMA) updated its list of recognised third-country central counterparties (CCPs) to include the Chicago Merchantile Exchange (CME).
To date, ESMA has recognised 19 third-country CCPs. CME is the first U.S. CCP to be included in the new regime, which requires third-country CCPs to be recognised by ESMA to operate in the EU.
The decision is welcome news for FIA members, as mandatory clearing for Category 1 CCPs in relevant classes of interest rate swaps begins on the 21 of June. Without recognition, European bank affiliates attempting to clear on CME would face dramatic increases in capital requirements, potentially harming liquidity and fragmenting markets.
FIA has been active on this issue and will continue to advocate for policies that will allow global markets to function smoothly and efficiently.
