On 23 November 2018, the European Securities and Markets Authority (ESMA) issued a public statement to address the risks of a no-deal Brexit in the area of central clearing. The ESMA board of supervisors supports the continued access to UK central counterparties to limit the risk of disruption in central clearing and to avoid negatively impacting EU financial market stability.
The statement provides:
“ESMA therefore welcomes the communication Preparing for the withdrawal of the United Kingdom from the European Union on 30 March 2019: a Contingency Action Plan, published on 13 November 2018 where the EC stated that it will act, to the extent necessary, to address financial stability risks in the EU arising from the withdrawal of the UK without any agreement. In such a scenario the EC has stated that it will adopt a temporary and conditional equivalence decision in order to ensure that there will be no disruption to central clearing.
Therefore, ESMA is engaging with the EC to plan, as far as possible, the preparatory actions for the recognition process of UK CCPs, in case of a no-deal scenario. ESMA has already started engaging with UK CCPs to carry out preparatory work. The aim is to ensure continued access to UK CCPs for EU clearing members and trading venues as of 30 March 2019, should all the conditions in EMIR, including any conditions set out in the equivalence decision, be fulfilled.”