LCH, ICE Clear Europe and LME Clear to keep providing services in EU in case of no-deal Brexit
ESMA announces that in the event of a no-deal Brexit, three UK CCPs – LCH Limited, ICE Clear Europe Limited and LME Clear Limited – will be recognised to provide their services in the EU.
There are more Brexit-related developments, with the latest ones concerning recognition of UK CCPs. The European Securities and Markets Authority (ESMA) has earlier today announced that in the event of a no-deal Brexit, three UK central counterparties (CCPs) – LCH Limited, ICE Clear Europe Limited and LME Clear Limited – will be recognised to provide their services in the EU.
ESMA explains that has made these recognition decisions in order to limit the risk of disruption in central clearing and to avoid any negative impact on the financial stability of the EU.
ESMA has previously communicated that its Board of Supervisors supports continued access to UK CCPs. Having assessed the applications and the information submitted by the three CCPs, and consulted the relevant authorities in accordance with EMIR, ESMA considers that the conditions for recognition under Article 25 of EMIR are met by the three CCPs in case of a on a no-deal Brexit.
Therefore, it has adopted decisions to recognise the three CCPs as third country CCPs under EMIR.
The recognition decisions would take effect on the date following Brexit date, under a no-deal Brexit scenario.
Earlier in February, ESMA said it had agreed Memoranda of Understanding (MoUs) with the Bank of England (BoE) for the recognition of CCPs and of the central securities depository (CSD) established in the UK, that would take effect in case the UK leaves the EU without a withdrawal agreement.
ESMA has previously said that its Board of Supervisors also supports continued access to the UK CSD. That recognition process is still on-going, the results of which will be published as soon as the process is finalised.