12 March 2013

ESMA publishes practical guidance for the recognition of Third Country CCPs by ESMA

ESMA will only review and respond to general questions regarding the preparation of an application for recognition or questions regarding procedural matters that are relevant to an application for recognition. ESMA will not review or respond to questions which would require or imply a pre-assessment of any TC-CCP’s application for recognition.

For the avoidance of doubt, ESMA does not review draft applications for recognition or parts of an application ahead of the full submission. Only the final version of a TC-CCP’s application for recognition will be acknowledged, reviewed or otherwise responded to.

ESMA may only recognise a TC-CCP where certain conditions have been satisfied. In particular the European Commission needs to have adopted an implementing act determining, amongst other things, that the legal and supervisory arrangements of the jurisdiction in which the CCP is established are equivalent to the requirements laid down in EMIR (Article 25(2)(a) of EMIR) and the jurisdiction in which the TC-CCP is established needs to have equivalent systems for anti-money laundering and combating the financing of terrorism to those established in the European Union (Article 25(2)(d) of EMIR). ESMA strongly recommends that prior to submitting an application for recognition, potential applicants ascertain whether the conditions in Article 25(2) are, or are likely to be, fulfilled. This is important because if the conditions in Article 25(2) are not fulfilled then ESMA will not be able to grant the application for recognition, meaning that clearing members and trading venues established in the European Union will have to cease using the clearing services of the TC-CCP with immediate effect.

Under Article 89(2) of EMIR, TC-CCPs that have already been recognised to provide clearing services in the European Union, in accordance with the national law of a European Member State, are required to apply for recognition by 15 September 2013 (i.e. within six months following the entry into force of the RTS) if they wish to provide clearing services in the European Union on an uninterrupted basis. If a TC-CCP has not already been recognised to provide clearing services in the European Union, in accordance with the national law of a European Member State as of the 15 March 2013 (entry into force of the RTS), or has been so recognised but does not apply for recognition by 15 September 2013, then that TC-CCP will not be able to offer clearing services to clearing members and trading venues established in the European Union until such time as the TC-CCP’s application for recognition had been granted.

If requested by ESMA, the TC-CCP applicant must send certified copies of supporting documentation.

Full guidelines

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