Bank Of England Statement On The European Securities And Markets Authority’s Decision Regarding EU Recognition Of UK Central Counterparties

The Bank of England (the Bank) welcomes the decision of the European Securities and Markets Authority (ESMA) to extend the existing EU recognition of UK central counterparties (CCPs). The decision enables continued access to the clearing services of UK CCPs by EU participants, and supports the sound and stable functioning of markets in both the UK and EU. The recognition decision follows the European Commission’s extension of EU equivalence for the UK’s legal and supervisory framework for CCPs in January 2025:

• Bank of England statement on the European Commission equivalence decision on the UK’s legal and supervisory framework for central counterparties

Alongside this, revisions have been agreed to the existing Memorandum of Understanding (MoU) between the Bank and ESMA regarding cooperation and information sharing in relation to UK CCPs. The revisions meet the new requirements for cooperation arrangements in EU legislation under the European Markets and Infrastructure Regulation.

The Governor of the Bank of England Andrew Bailey said: “The Bank is responsible for supervising financial market infrastructures (FMIs) that are used by market participants from around the world. Our commitment to cooperation with other authorities enables the effective cross-border supervision of FMIs. As the lead supervisor and resolution authority for UK CCPs, we have a longstanding relationship with ESMA, and we look forward to our continued cooperation under the updated MoU.

Background

• Memorandum of Understanding between ESMA and the Bank of England to set out arrangements for cooperation on the monitoring and supervision of CCPs established in the UK (PDF)
• ESMA extends the tiering and recognition of the three UK-based CCPs