On Mar. 17, ESMA extended tiering and recognition of UK-based CCPs.
ESMA decided to temporarily extend application of recognition decisions under EU Market Infrastructure Regulation (EMIR) for 3 central counterparties established in UK.
On Jan. 30, 2025, EC adopted a new equivalence decision in respect of the regulatory framework applicable to central counterparties (CCPs) in the United Kingdom.
ESMA has prolonged tiering determination and recognition decisions for 3 recognized UK CCPs (ICE CEU, LCH LTD (as Tier 2), UK LME Clear (as Tier 1)) that were adopted by ESMA on Sep. 25, 2020, to align with expiry of new equivalence decision.
Application of tiering determination/recognition decisions extended to Jun. 30, 2028.
According to EMIR, one of the conditions for recognition of a 3rd country CCP by ESMA is establishment of cooperation arrangements between ESMA and relevant authority.
Revised MoU follows amendments introduced by EMIR 3 on the requirements for the content of cooperation arrangements, in particular re systemically important CCPs.
Revised MoU replaces earlier version concluded by ESMA and UK BoE in 2020.
UK BoE Statement
Also on Mar. 17, 2025, UK BoE issued a statement welcoming ESMA's decision to extend the existing EU recognition of the three UK-based central counterparties.
Said decision enables continued access to the clearing services of UK CCPs by EU participants, and supports sound and stable functioning of markets in UK and EU.
Concerning the revised MoU, UK BoE Governor said he looks forward to continuation of longstanding relationship with ESMA, and continued cooperation under updated MoU.
