On 16 May 2013, the EU Commission published a memo on the implementation of the framework under Article 25 of EMIR for recognising CCPs that are established outside of the EU (“Non-EU CCPs”) and which wish to provide services to market participants that are established within the EU.
The Commission suggests that, in practice, two processes will need to be run in parallel:
- Non-EU CCP recognition procedures administered by ESMA; and
- Foreign jurisdiction equivalence decisions administered by the EU Commission.
Non-EU CCPs currently providing services to EU clearing members must apply for recognition to ESMA by 15 September 2013, irrespective of the type of financial products cleared. ESMA’s recognition process can take up to 9 months, during which time Non-EU CCPs may continue to provide services to EU clearing members already participating in those CCPs. However, ultimately, clearing members incorporated under the law of an EU Member-State and their branches located in Non-EU countries (but not their subsidiaries established in such jurisdictions) will only be able to use non-EU CCPs which have been recognised under EMIR.
For the preparation of equivalency decisions, the EU Commission has asked ESMA to provide technical advice on the supervisory framework applicable in third-countries. Technical advice for a first set of countries are expected by 15 June 2013 and, for a second set of countries, by 15 September 2013. The EU Commission stresses that this process is ‘outcome-focused’ and is not aimed at checking that rules identical to EU rules applicable to CCPs are in place in the third-country.Contact Us