Equivalence decision eases access to clearing services
On April 29, the European Securities and Markets Authority announced the recognition of 10 central counterparties located in four Asian countries. The action means that these CCPs can provide clearing services to clearing members or trading venues established in the EU.
ESMA explained that these CCPs are established in jurisdictions that have been assessed as “equivalent” by the European Commission with regard to their legal and supervisory arrangements for CCPs.
The 10 CCPs include ASX Clear (Futures), HKFE Clearing Corporation Limited, Japan Securities Clearing Corporation, Tokyo Financial Exchange Inc and Singapore Exchange Derivatives Clearing Limited. At least 30 other third-country CCPs have applied for recognition but are still on the waiting list.
In a related but separate development, the European Commission’s banking committee agreed to extend the transitional period related to capital requirements for exposures to central counterparties by another six months. The vote paves the way for the Commission to formally extend the deadline to Dec. 15, which will provide more time for European regulators to authorize EU clearinghouses and recognize third-country clearinghouses.
The Commission explained that the extension will allow European banks and their overseas subsidiaries that are members of non-recognized clearinghouses to avoid a “significant increase” in their capital requirements and the potential that they might withdraw from those clearinghouses.
The extension is expected to be formally adopted in the coming weeks and published by June.
