The Bank of England (‘the Bank’) has issued a Consultation Paper and draft Statement of Policy setting out the Bank’s proposed approach to granting comparable compliance to certain incoming central counterparties (‘CCPs’) recognised to provide clearing services to clearing members or trading venues established in the UK.
This Consultation Paper is relevant to recognised incoming CCPs that have been designated as Tier 2 by the Bank in accordance with Article 25(2a) of EMIR and to Tier 2 CCPs’ relevant national authorities. It should be read alongside the Bank’s approach to tiering incoming central counterparties under EMIR Article 25.
Under EMIR Article 25a(1), a Tier 2 incoming CCP (‘requesting CCP’) may submit a reasoned request that the Bank assesses whether in its compliance with the applicable home regime and taking into account the provisions of the regulations made under Article 25(6), a CCP may be deemed to satisfy compliance with certain EMIR requirements (Article 16, Title IV and Title V). The purpose of this Consultation Paper is to set out the Bank’s approach on how it would assess such a request.
The Bank proposes to grant comparable compliance to requesting CCPs for specific areas where the Bank considers equal or comparable supervisory outcomes are achieved through the home regimes. Where comparable compliance has been granted, the Bank proposes to defer to home authorities and not to engage in independent direct regulation or supervision of those specific areas, and consequently reduce the administrative and regulatory burden on requesting CCPs.
The Bank proposes that the implementation date for the final policy will be Friday 1 July 2022. This consultation closes on Friday 25 February 2022.