The Department for Exiting the European Union has published a memorandum on the European Commission’s proposed Regulation amending the European Securities and Markets Authority Regulation and the European Markets Infrastructure Regulation (EMIR) as regards the procedures and authorities involved for the authorisation of central counterparties (CCPs) and requirements for the recognition of third-country CCPs.

The memorandum states that the Government does not support the inclusion of location requirements for substantially significant third country CCPs, as the G20 commitments reforming  over-the-counter derivatives markets require a global approach to CCP regulation and supervision. In addition, market fragmentation would increase the cost of trading and clearing, acting as a drag on growth and could discourage firms from hedging their risks using derivatives markets.  The Government believes that systemic risk of clearing should be addressed through heightened supervision, deep cooperation and clear coordination.

View DexEU confirms UK position on European Commission’s proposals for enhanced supervision of third-country CCPs, 13 July 2017