A group of fourteen trade associations urged the European Commission ("EC") to grant an extension of the temporary equivalence for UK central counterparties ("CCPs") until a new framework for recognition of non-EU CCPs becomes applicable under "EMIR 2.2" and until the European Securities and Markets Authority ("ESMA") completes its review of existing recognition decisions.
Mitigation of Market Disruption Risk to EU Counterparties Post-Brexit
The trade associations urged the EC to take action to "maintain[] financial stability" in the event of a "No-Deal" Brexit, and to provide a bridging measure to ensure that terms of EMIR 2.2 will be available even if UK CCPs are not able to obtain recognition. The trade associations welcomed a decision by the EC to grant temporary recognition for UK CCPs until March 2020, but noted that the current expected date of the UK exit from the European Union is only two months before. In particular, the trade associations requested that the EC take extending action "well in advance of" year end.
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