EACH Responds To The OECD Consultation “Pillar One – Amount A: Regulated Financial Services Exclusion”

The European Association of CCP Clearing Houses (EACH), along with the European Central Securities Depositories Association (ECSDA) and the Federation of European Securities Exchanges (FESE), welcomes the work of the OECD in trying to secure a global consensus over a fair taxation methodology for the digital economy. The three Associations have previously contributed to this debate through the OECD consultation on the “Unified Approach” under Pillar One. Today, the Associations would like to emphasize once again our call for carve-out, from the scope of the Pillar One, for CCPs, CSDs and Trading Venues, line with the approach followed by the OECD with other financial services institutions.

Specifically, in the attached EACH response, EACH Members focus on the reasons why CCPs should be included in the definition of Regulated Financial Institution, and therefore carved out from the scope of the Pillar One, as follows:

• CCPs are subject to authorization requirements: In Europe, the procedures for the authorisation of a European CCP are strictly regulated via the EMIR Legislation. At global level, the CPMI-IOSCO Principles for financial market infrastructures specifies that FMIs should be regulated, supervised, and overseen by a central bank, market regulator, or other relevant authority.
• CCPs are subject to capital requirements: European CCPs are subject, via Article 16 of EMIR, to have a permanent and available initial capital of at least EUR 7,5 million.
• CCPs are subject to activities requirements: EACH Members suggest that, for what concerns the activities requirements, the definition is in line with those of the other Regulated Financial Institutions, i.e. that CCPs, CSDs and Trading Venues are Market Infrastructures for which the total gross income attributable to clearing activities, trading activities, settling activities equals or exceeds 75% per of the Group Entity’s total gross income during the Period.

For more information, please find the EACH response attached or visit the EACH website www.eachccp.eu