Bank of England Announces Details of Post-Brexit Temporary Recognition Regimes for CCPs and CSDs

The Bank of England has published details of its prospective new role as supervisor of financial markets infrastructure at the end of the implementation period following the U.K.’s exit from the EU. The BoE’s website contains information on:
 

• The temporary recognition regime for non-U.K. central counterparties. The TPR will take effect at the end of the implementation period and last for three years, allowing eligible non-U.K. CCPs to continue to provide clearing services in the U.K. before formal full recognition is granted.
• The transitional regime for non-U.K. central securities depositories. In October 2018, the BoE published a letter to CEOs of CSDs stating that non-U.K. CSDs wishing to continue providing services to the U.K. should obtain recognition. The recognition process will commence once an equivalence decision for the relevant CSD's jurisdiction has been made. CSDs will be entitled to continue providing services under the U.K.'s transitional regime from the end of the implementation period until the recognition process is complete. Non-U.K. CSDs must apply for recognition within 6 months of an equivalence decision having been made by HM Treasury.
• The application of the U.K. settlement finality regime to FMIs. The regime sets out how overseas CCPs, CSDs and payment systems can receive settlement finality designation within the U.K. The existing regime has been amended to dis-apply certain designation requirements for non-U.K. law governed systems. The BoE has requested EEA systems to provide indications of their intention to enter the U.K.’s temporary Settlement Finality designation regime pending permanent designation.

View the BoE's information on the TPR for CCPs and CSDs.

View the BoE's October 2018 letter to CSDs.

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