Application information for non-UK FMIs
Recognition of non-UK CCPs
The Bank is responsible for recognising non-UK CCPs who wish to provide services in the UK.
The UK has retained the EU framework for recognising non-UK CCPs (known as ‘EMIR 2.2’) and the Bank has responsibility for finalising policy for implementing EMIR 2.2. The Bank has issued a Consultation Paper on its approach to classifying individual incoming CCPs according to the level of systemic risk they could pose to UK financial stability, known as ‘tiering’. CCPs that are classified as ‘Tier 2’ by the Bank are required to meet specific UK standards under on-shored EMIR and can be subject to direct supervision by the Bank subject to a finding of comparable compliance. The Bank has also published a Consultation Paper on its approach to assessing comparable compliance for non-UK CCPs that have been designated as Tier 2 by the Bank.
Jurisdictional equivalence and an MoU with the relevant third country regulator are required as part of the recognition process. If a CCP’s jurisdiction has not been granted equivalence, their regulator or finance ministry can engage directly with HMT using the following contact: email@example.com.
Non-UK CCPs may continue to submit formal recognition applications to the Bank. Non-UK CCPs in the TRR must submit an application for recognition by 30 June 2022 to remain in the TRR. Non-UK CCPs not in the TRR can apply for recognition at any time.
Tiering forms part of the recognition process for non-UK CCPs. However, as set out in the tiering Consultation Paper, applicant CCPs are not required to submit information on tiering at this stage. Non-UK CCPs applying for recognition should continue to submit recognition applications in accordance with existing technical standards (as set out in the Update letter sent in October 2018). The Bank will write separately to incoming CCPs to request this information when the Bank is ready to begin its tiering assessments to ensure that the information provided is appropriate and up-to-date.
We will ensure that non-UK CCPs are kept informed of relevant developments and they should also refer to the following information sources:
Please feel free to contact us at FMI-Enquiries@bankofengland.co.uk
Non-UK CCP recognition fees
The Bank published a consultation on 25 October 2018 on a proposed fee regime for non-UK CCPs seeking UK recognition.
Following the consultation and having considered the feedback received, the Bank has decided to introduce a recognition fee of £35,000 for non-UK CCPs. For more information, please see the Statement of Policy published by the Bank on 15 April 2019.
The Bank will consult on its approach to charging annual fees to non-UK CCPs in due course
Recognition of non-UK CSDs
On 6 December 2018, the UK parliament approved legislation which sets out how a non-UK CSD can continue to provide services in the UK following the UK’s withdrawal from the EU. In parallel, the Bank published a letter to non-UK CSDs, outlining the circumstances in which non-UK CSDs would need to be recognised and the process that the Bank expects to follow.
The Bank has published guidance that sets out the manner in which a non-UK CSD may make a recognition application. Jurisdictional equivalence and an MoU with the relevant third country regulator are required as part of the recognition process. If a CSD’s jurisdiction has not been granted equivalence, their regulator or finance ministry can engage directly with HMT using the following contact: firstname.lastname@example.org.
Any enquiries should be directed to CSDemail@example.com, along with a contact name and details for further discussion.
Non-UK CSD recognition fees
The Bank published a consultation on 15 April 2019 on a proposed fee regime for non-UK CSDs seeking UK recognition.
Following the consultation and having considered the feedback received, the Bank has decided to introduce a recognition fee of £30,000 for each non-UK CSDs recognition. The fee will be payable once the non-UK CSD has been recognised by the Bank. For more information, please see the Statement of Policy published by the Bank on 31 July 2019.
Applying to receive UK settlement finality protection
On 18 February 2019, the UK parliament approved a statutory instrument that makes amendments to the UK Settlement Finality Regulations (SFRs). These set out how overseas CCPs, CSDs and payment systems can receive settlement finality designation within the UK. The UK parliament has also approved a second statutory instrument making further minor amendments to the UK SFRs. The effect of these is to dis-apply, for systems not governed by UK law, two of the designation requirements, relating to information sharing to third parties and notification requirements by participants in the event of their insolvency.
There are different application processes for different FMI types. All non-UK law private systems can apply using this application form and guidance – Central Banks should contact the Bank directly instead by emailing SFD-Enquiries@bankofengland.co.uk.
There are no statutory timelines for processing settlement finality designation applications, but the Bank will endeavour to process these applications as soon as practicable.
The Bank has published its approach to the monitoring of third country systems designated under the SFR. The Bank does not at this time intend to charge fees for the monitoring of compliance with the SFRs.
On 31 July 2019, the Bank announced that it does not intend, at this time, to charge fees to non-UK law FMIs for UK settlement finality designation.
Any queries from systems or their users regarding this process should be sent to SFD-Enquiries@bankofengland.co.uk.