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European Securities and Markets Authority

The European Market Infrastructure Regulation (“EMIR”) was adopted by the European Parliament on 4 July 2012.  Under EMIR, a CCP established outside of the European Union may continue to provide clearing services to clearing members established in the European Union only if the European Securities and Markets Authority (“ESMA”) recognises the CCP as a ‘third-country CCP’.  In addition, under the European Capital Requirements Directive IV (“CRD IV”), European banks are permitted to apply concessional risk weightings to their group’s novated exposures to CCPs if they are “Qualifying CCPs”.  To become a Qualifying CPP, a CCP established outside the European Union must obtain recognition as a ‘third country CCP’ under EMIR.

ASX Clear (Futures) and ASX Clear each obtained recognition as a “third-country CCP” from ESMA with effect from 27 April 2015.  Two important steps to obtaining such recognition were (i) the adoption by the European Commission of its equivalence decision for Australia’s regulatory regime on 30 October 2014 and (ii) the signing of a Memorandum of Understanding relating to cooperation between ASIC, RBA and ESMA on 27 November 2014.

See here for the link to ESMA’s website for further details on the recognition of ASX Clear (Futures) and ASX Clear including details of the classes of financial instruments covered by the recognition decisions.

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