The European Commission has published a Decision temporarily determining that U.K. central counterparties will be deemed equivalent to EU standards under the European Market Infrastructure Regulation. The Decision will apply from January 1, 2021 until June 30, 2022. The U.K.'s Brexit transition period ends on December 31, 2020, after which it will cease to form part of the EU's arrangement for financial services. The Decision grants equivalence for a limited 18-month duration.
The Commission made its first equivalence decision for UK CCPs in December 2018, to cater for the possibility of a no-deal Brexit. That decision originally expired on March 30, 2020 but was extended in December 2019 for a period of one year. These decisions never came into effect. The Commission's latest decision provides a definite end-date of June 30, 2022 for U.K. CCP equivalence.
The Bank of England has released a statement welcoming the Commission's Decision to temporarily provide equivalence for U.K. CCPs. The U.K. has already implemented a temporary recognition regime for non-U.K. CCPs that will enable EU CCPs to continue providing services in the U.K. from January 1, 2021 for a period of three years.
View the Commission's temporary equivalence Decision.
View the Commission's statement on its temporary equivalence Decision.
View the Bank of England's statement on the EU's temporary equivalence Decision.
View details of the European Commission's previous equivalence decision for UK CCPs.
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