August 12, 2020

Volume X, Number 225

August 12, 2020

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August 11, 2020

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August 10, 2020

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European Commission Publishes Communication on the Post-Brexit Transition Period

On July 9, the European Commission (the Commission) published a communication to help national authorities, businesses and citizens prepare for the changes that will arise at the end of the Brexit transition period on December 31 (the Communication).

Most importantly, the Commission notes that it is considering the adoption of a time-limited equivalence decision in respect of UK central counterparties (CCPs) that clear derivatives for European Union (EU) clearing members. The adoption of such an equivalence decision will ensure that UK CCPs may continue to provide such services following the expiry of the transition period and thus avoiding a clearing ‘cliff edge.’

The Commission notes that such a time limited decision would allow EU-based CCPs to develop further their capacity to clear relevant trades in the short and medium term, whilst also providing EU clearing members with time to implement the necessary steps to reduce their systemic exposure to UK market infrastructures.

In terms of a broad equivalence regime between the EU and UK, the Commission requested that the UK complete questionnaires covering 28 equivalence areas. By the end of June, only four questionnaires had been completed and returned to the Commission. Consequently, the Commission could not conclude its equivalence assessments by the end of June. The Commission will continue the assessments based on further replies that it is currently receiving from the UK.

The Communication is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 192


About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring and documentation relating to OTC derivatives and structured products.

Prior to joining Katten, Nathaniel was a member of the US Regulatory and the Derivatives and Structured Finance practices at Allen & Overy LLP.

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...