The Bank of England (the Bank) welcomes the decision of the European Securities and Markets Authority (ESMA) to extend the existing EU recognition of UK central counterparties (CCPs). The decision enables continued access to the clearing services of UK CCPs by EU participants, and supports the sound and stable functioning of markets in both the UK and EU. The recognition decision follows the European Commission’s extension of EU equivalence for the UK’s legal and supervisory framework for CCPs in January 2025:
Alongside this, revisions have been agreed to the existing Memorandum of Understanding (MoU) between the Bank and ESMA regarding cooperation and information sharing in relation to UK CCPs. The revisions meet the new requirements for cooperation arrangements in EU legislation under the European Markets and Infrastructure Regulation.
The Governor of the Bank of England Andrew Bailey said: “The Bank is responsible for supervising financial market infrastructures (FMIs) that are used by market participants from around the world. Our commitment to cooperation with other authorities enables the effective cross-border supervision of FMIs. As the lead supervisor and resolution authority for UK CCPs, we have a longstanding relationship with ESMA, and we look forward to our continued cooperation under the updated MoU.
Source: Bank of England
ESMA Extends The Tiering And Recognition Of The Three UK-Based CCPs
The European Securities and Markets Authority (ESMA) announced its decision to temporarily extend the application of the recognition decisions under Article 25 of the European Market Infrastructure Regulation (EMIR) for three central counterparties (CCPs) established in the United Kingdom (UK).
On 30 January 2025, the European Commission adopted a new equivalence decision in respect of the regulatory framework applicable to CCPs in the UK.
Subsequently, ESMA has prolonged the tiering determination decisions and recognition decisions for the three recognised UK CCPs – ICE Clear Europe Ltd, LCH Ltd (as Tier 2) and LME Clear Ltd (as Tier 1) – that were adopted by ESMA on 25 September 2020, to align with the expiry date of the new equivalence decision.
The application of the tiering determination decisions and recognition decisions is temporarily extended until 30 June 2028.
ESMA has also signed a revised Memorandum of Understanding (MoU) with the Bank of England as required by EMIR 3.
Source: ESMA
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