ESMA Publishes Statement on Preparations Regarding Clearing and Settlement for a No-Deal Brexit
On March 28, the European Securities and Markets Association (ESMA) published a statement updating market participants on its preparations for the United Kingdom’s withdrawal from the European Union, in the event of an agreement on transitional arrangements (Withdrawal Agreement) not being in place (No-Deal Brexit). ESMA’s update follows the European Council’s (EC’s) agreement to the UK government’s request to extend the United Kingdom’s withdrawal from the European Union (Brexit) to either April 12 if the House of Commons does not approve a Withdrawal Agreement by March 29, or to May 22 if it does.
In relation to clearing and settlement, ESMA stated that the extension of Brexit means that ESMA’s decision to recognize three UK central counterparties (CCPs) and the one UK central securities depository (CSD) (as reported in the Corporate & Financial Weekly Digest edition on February 22, 2019), would no longer apply from March 30.
ESMA intends to amend its recognition decisions to ensure the recognition of UK CCPs and the UK CSD in the event of Brexit occurring on April 12. The EC also announced on March 25 that it intends to adopt amended equivalence decisions in relation to UK CCPs and CSDs to take into account the extension of Brexit.
ESMA’s statement is available here.
The EC’s statement is available here.