ESMA Selects 3 UK CCPs for Post-Brexit Operation

The European Securities and Markets Authority (ESMA) announced on Monday that it will recognize three central counterparties (CCPs) established in the United Kingdom as third-country CCPs to provide services in the twenty-eight nation bloc after the deadline of the Brexit transaction.

The three CCPs are ICE Clear Europe Limited, LCH Limited, and LME Clear Limited.

Preparation for Post-Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term

After years of the referendum for the UK’s exit from the European Union, the divorce between the two was sealed earlier this year with an 11-month transition period until December 31, 2020.

The lawmakers and regulators of the two sides are streamlining the separation as many, including individuals and companies, will exit.

The updated Delegated Acts published on September 21 set out the new regulatory and supervisory regime for the third-country CCPs. Additionally, the European Commission adopted an equivalence decision to determine a limited period of time for the application of the regulatory and supervisory framework applicable to CCPs established in the UK.

“In line with the equivalence decision, the recognition decisions will only take effect on the day following the end of the transition period and continue to apply while the equivalence decision remains in force, which is for 18 months until 30 June 2022,” the announcement stated.

CCPs are financial institutions that take on the counterparty credit risks between parties involved in transactions, providing clearing and settlement services for trades in foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, securities, options, and derivative contracts. Thus, their services are crucial in the financial market.

Meanwhile, the UK’s FCA is seeking consultation on the authorization of the EEA-licensed companies to operate in the country post-Brexit.