As the time-limited equivalence decision for UK CCPs expires on 30 June 2025, FIA and several other trade associations across Europe urge the European Commission to extend the equivalence decision for UK CCPs in a non-time-limited manner and well in advance of 31 March 2025.
Since the Commission made the current time-limited equivalence decision for UK CCPs, the new European Market Infrastructure Regulation (EMIR 3.0), the main legislative intent of which is to reduce EU counterparties’ exposure to systemically important Tier 2 CCPs (all of which are UK CCPs) and to increase the attractiveness of EU CCPs, has been published in the Official Journal of the EU.
The implementation of an Active Account Requirement is predicated on continued access for EU counterparties to global liquidity pools on Tier 2 CCPs, which necessitates an equivalence decision for UK CCPs being in place after 30 June 2025. The renewal of the UK CCP equivalence decision will allow for the Active Account Requirement to fully enter into application and thereby address the perceived financial stability risks represented by the exposures of EU counterparties to Tier 2 CCPs.
It will also provide EU market participants with continued access to global pools of liquidity after 30 June 2025 for a wide range of financial instruments, including products available for clearing on UK CCPs only (e.g. some commodity derivatives and interest rate swaps) and for products with very low liquidity on EU CCPs.
Read the letter from FIA and other trade associations here.
