On 28 March 2022, HM Treasury published the Government’s response to the feedback it received to its earlier consultation on an expanded resolution regime for central counterparties (CCPs). In its earlier consultation the Government asked stakeholders for views on proposals relating to:

  • General resolution powers, including powers to place a CCP into resolution and the power to rematch a CCP’s book.
  • Loss allocation powers.
  • No credit worse off safeguard.
  • Second tranche of skin in the game.
  • Other powers (including compensation arrangements).

In its response the Government provides feedback on the responses it received on these proposals and on other miscellaneous comments it received (including application to foreign jurisdictions). Overall, respondents welcomed the proposed expansion of the UK resolution regime for CCPs and were broadly in agreement with the proposed framework, noting that it was in line with international guidance.

The Government plans to legislate when parliamentary time allows and will set out further information on plans to legislate in due course. It is the Government’s intention that, once any legislation is passed, the powers will be made available for the Bank of England (BoE) to use as soon as practicable. However, the Government and the BoE are keen to ensure industry is given sufficient time and notice to make any necessary changes to accommodate any new powers, such as changes to CCP rulebooks. The Government and the BoE will therefore work closely with industry as its legislative plans and timings become clearer to support them to do this. On some aspects of the regime the BoE will look to consult and engage with industry separately in due course.