Thomas Murray - ESMA begins recognition of third country CCPs – but no US presence yet

ESMA begins recognition of third country CCPs – but no US presence yet

On 29 April, ESMA (the European Securities and Markets Authority) recognised 10 third country CCPs (central counterparty clearinghouses), meaning that they can offer clearing services to European market participants on an equivalent basis to their European counterparts. The jurisdictions in which they operate have been deemed equivalent by the European Council in regards to their rules and regulations governing clearing houses.

The CCPs authorised are based in Australia, Hong Kong, Japan and Singapore. The move represents Europe’s desire to push ahead with its clearing framework, although something of an impasse remains with the US regulator, the CFTC (Commodity Futures Trading Commission).

Third Country approved CCPs in Europe

source: ESMA

We looked at the differences between the European and US regulators recently: Equivalence in European and US clearing rules

The move also comes in advance of a full set of authorisations being handed out to European domiciled CCPs. ICE Clear Europe remains a notable absentee from the list of 16 authorised CCPs in Europe. Athex Clear was the last European CCP to be authorised on 22 January 2015.

It remains unclear when the rest of the European CCPs will be authorised. Canada, Mexico and India are expected to be considered equivalent jurisdictions with Europe soon, so CCPs in those countries could be authorised to provide clearing services to clearing members or trading venues established in Europe before some of the European established CCPs.