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’. Under the European Capital Requirements Directive IV (“CRD IV”), European banks will be able to apply concessional risk weightings to their group’s novated exposures to CCPs recognised as ‘third country CCPs’ under EMIR.
ASX Clear (Futures) and ASX Clear have applied to ESMA for this recognition. On 30 October 2014 the European Commission adopted its equivalence decision for Australia’s regulatory regime – an important precondition for recognition of ASX Clear (Futures) and ASX Clear. ESMA must make its recognition decisions before the end of April 2015 (ASX Clear (Futures)) and mid June 2015 (ASX Clear).