Non-EU CCPs and TRs
Central Counterparties and Trade Repositories
In 2012 the European Commission (EC) mandated ESMA to provide them with technical advice on the equivalence between some third countries' (non-EU countries) regulatory regimes, and with respect to the different aspects of the EU regulatory regime under EMIR.
These specific areas concern:
- the recognition of third country (non-EU) CCPs; and/or
- the recognition of third country (non-EU) TRs; and/or
- the identification of potentially duplicative or conflicting requirements regarding the clearing obligation, reporting obligation, non-financial counterparties and risk-mitigation techniques for OTC derivative contracts not cleared by a CCP.
The EC is expected to use ESMA’s technical advice to prepare possible implementing acts under Articles 25(6), 13(2) and 75(1) of EMIR concerning the equivalence between the legal and supervisory framework of the third countries (non-EU countries).
Regarding CCPs and TRs, based on those implementing acts, complemented in the case of the TRs by an international agreement foreseen in Article 75(2) EMIR, ESMA may recognise a CCP or a TR authorised in that third country. The names of third country (non-EU CCPs) that have applied or which have already been recognised when applicable is regularily updated by ESMA.
Regarding OTC derivatives transactions where the EC adopts such an implementing act, if at least one of the counterparties entering into such transaction is established in that third country (non-EU country) and the contract is subject to EMIR, the counterparties will be deemed to have fulfilled the requirements of EMIR by disapplying EMIR provisions and applying the provisions of the equivalent third (non-EU) country regime to avoid duplicative or conflicting rules.
Please note that the equivalence assessment leading to ESMA's technical advice followed an objective-based approach, where the capability of the regime in the third country to meet the objectives of the EU Regulation was assessed from a holistic perspective. Furthermore ESMA’s conclusions in respect of a technicaladvice should not be seen to prejudge any final decision of the EC or of ESMA.