Europe extends QCCP deadline
On June 8, the European Commission officially extended the deadline for implementing new rules that will require clearing firms to set aside more capital for their exposures to clearinghouses that have not been deemed "qualified central counterparties."
The deadline has now been moved to Dec. 15. The Commission explained that the extension would avoid penalizing clearing members by subjecting them to higher capital requirements while clearinghouses are in the process of being authorized and recognized by European regulators. The Commission added that without an extension, some clearing members might withdraw from those clearinghouses, reducing the availability of clearing services and disrupting the markets.
Currently, there are two CCPs established in the EU that are still awaiting authorization. Additionally, several third-country CCPs are awaiting recognition.
As the Commission noted in the regulation, "If the transitional period is not extended, institutions established in the Union having exposures to those two CCPs would see significant increases in the ‘own funds’ requirements for those exposures. While such increases may only be temporary, they could potentially lead to the withdrawal of those institutions as direct participants in those CCPs … and thus cause disruption in the markets in which those CCPs operate and potentially in Union markets in general."
