Following a statement by Mairead McGuinness, European commissioner for financial services, towards the end of last year, the European Commission has adopted a decision to extend equivalence for UK central counterparties (CCPs) until 30 June 2025. The original equivalence decision, adopted in September 2020, was due to expire at the end of June 2022. The extended equivalence decision will, among other things, allow EU counterparties to comply with the EMIR clearing obligation whilst using UK CCPs. This is welcome relief for the industry which might otherwise have faced interrupted access to clearing as well as difficulties in achieving regulatory compliance whilst maximising access to liquid markets.
The equivalence decision is accompanied by a targeted public consultation on ways to expand central clearing activities in the EU and improve the attractiveness of EU CCPs in order to reduce the EU’s over-reliance on systemic third-country CCPs.
Please speak to your usual Macfarlanes contact if you have any questions.