EMIR: Third counties CCPs and the UK, a long story

It should be recalled that the possibility of clearing on such CCPs¹ requires first an equivalence between the two jurisdictions, which is formalized by the European Commission. This then allows for the recognition of CCPs by ESMA. As of autumn 2020, temporary recognition was granted for a limited period (until June 2022) and then, in February 2022, extended by 3 years (until June 2025).

Clearing on UK CCPs is now allowed until 30 June 2028, with the EC extending the equivalence of the two regulations on 30 January 2025 (2025/215) and ESMA extending the recognition of CCPs on 17 March 2025.

This concerns ICE Clear Europe Ltd, LCH Ltd and LME Clear Ltd.

It may be added that another part of the EMIR regulation affects the first two, since they have been classified as ‘Tier 2’ by the European regulator, as they may represent a systemic risk for the Union. At the end of 2021, ESMA identified the following risk scenarios:

• Clearing of rate derivatives in euro and Polish zloty (LCH Ltd),

• And CDS² and STIR³ clearing offers when they relate to the Euro (ICE Clear Ltd).

It is these two CCPs for these OTC derivatives contracts that are within the scope of the AAR (Active Account Requirement) established by EMIR 3.

Equivalence by the EC
Recognition by ESMA