UK CCPs avoid potential no-deal Brexit chaos
08 January 2020 London
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The European Securities and Markets Authority (ESMA) has extended its recognition of three UK central counterparties (CCPs) in order to ensure business continuity in the event of a no-deal Brexit.
The decision, which was made public on 23 December 2019, reflect the extension of the expiry date of the European Commission on the equivalence of the UK CCP legal framework.
UK CCPs LCH, ICE Clear Europe and LME Clear were originally given recognised third-party status in the event of a no-deal Brexit in February 2019 as part of the EU’s transition planning. This was then updated in April 2019 to reflect the new Brexit timetable once the extension to Article 50 of the Treaty of the European Union was granted.
Of last month's extension, a spokesperson for LME Clear tells SLT that the CCP “welcomes the amendments made to ESMA’S conditional recognition of LME Clear as a third-country CCP.
“This now ensures LME Clear can continue to provide clearing services without interruption to all of its members, including those incorporated in the European Economic Area, following the UK’s withdrawal from the EU.”
Commenting on the EU’s recognition for UK CCPs at the time of the April 2019 extension, LCH Group CEO Daniel Maguire and CEO of LCH Martin Pluves said in a joint statement that the extension means LCH Limited will be able to continue to offer all clearing services for all products and services to all members and clients in the event of a no-deal scenario.
The UK’s prime minister is set to kick off talks with EU commissioner Ursula Von Der Leyen in Downing Street this week, on the details of the two parties' future trading relationship.
Boris Johnson won a large majority in the UK’s December general election which means that the EU Withdrawal Bill is now expected to comfortably pass its final votes in House of Commons tomorrow, thereby putting to bed any threat of a no-deal Brexit.
Speaking today, von der Leyen warned it would be "impossible" to reach a comprehensive trade deal by the end of 2020. She said if the deadline was not extended it was not a case of "all or nothing", but of priorities.
The decision, which was made public on 23 December 2019, reflect the extension of the expiry date of the European Commission on the equivalence of the UK CCP legal framework.
UK CCPs LCH, ICE Clear Europe and LME Clear were originally given recognised third-party status in the event of a no-deal Brexit in February 2019 as part of the EU’s transition planning. This was then updated in April 2019 to reflect the new Brexit timetable once the extension to Article 50 of the Treaty of the European Union was granted.
Of last month's extension, a spokesperson for LME Clear tells SLT that the CCP “welcomes the amendments made to ESMA’S conditional recognition of LME Clear as a third-country CCP.
“This now ensures LME Clear can continue to provide clearing services without interruption to all of its members, including those incorporated in the European Economic Area, following the UK’s withdrawal from the EU.”
Commenting on the EU’s recognition for UK CCPs at the time of the April 2019 extension, LCH Group CEO Daniel Maguire and CEO of LCH Martin Pluves said in a joint statement that the extension means LCH Limited will be able to continue to offer all clearing services for all products and services to all members and clients in the event of a no-deal scenario.
The UK’s prime minister is set to kick off talks with EU commissioner Ursula Von Der Leyen in Downing Street this week, on the details of the two parties' future trading relationship.
Boris Johnson won a large majority in the UK’s December general election which means that the EU Withdrawal Bill is now expected to comfortably pass its final votes in House of Commons tomorrow, thereby putting to bed any threat of a no-deal Brexit.
Speaking today, von der Leyen warned it would be "impossible" to reach a comprehensive trade deal by the end of 2020. She said if the deadline was not extended it was not a case of "all or nothing", but of priorities.
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