The International Organization of Securities Commissions (IOSCO) has published a letter from Michel Barnier, European Commissioner for Internal Market and Services, about the recognition of non-EU central counterparties (CCPs) under the European Market Infrastructure Regulation (EMIR). The Commissioner’s letter is in response to IOSCO’s letter of 22 November 2013, which requested clarification of the Commission’s approach to assessing the legal and supervisory arrangements of third-country CCPs.

In the letter, Mr Barnier explains that the Commission has received comparative technical advice from the European Securities and Markets Authority (ESMA) relating to the legal and supervisory arrangements of CCPs in six Asia Pacific jurisdictions (Australia, Hong Kong, India, Japan, Singapore and South Korea). The Commission is in the process of analysing ESMA’s advice. Where it identifies any significant differences in regulatory outcomes, it will engage in dialogue with the relevant authorities. The Commission understands that ESMA will shortly submit the supporting draft memoranda of understanding (MoUs) to the relevant third-country authorities for their review.

Mr Barnier confirms that the Commission is aware that CCPs in a number of third-country jurisdictions (including in the Asia Pacific region) are providing services to subsidiaries of EU banks that are subject to the Capital Requirements Regulation (CRR). The Commission intends to engage in equivalence assessments for additional third-country jurisdictions in “the very near future” to facilitate the recognition of these CCPs, where possible. The Commission will carefully assess the timeframe needed to complete these assessments, and will consider extending the time period in line with article 497 of the CRR if it deems that the relevant criteria have been fulfilled.

View Letter from Michel Barnier to the Chairman of IOSCO, 20 December 2013

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