HMT sets out approach to updating the UK's regulatory framework for CCPs

HM Treasury has published a policy paper and two related statutory instruments (SI) on its approach to updating the UK's regulatory framework for central counterparties (CCPs). The Financial Services and Markets Act 2023 gave the Bank of England (BoE) powers to make rules for CCPs, envisaging that the CCP requirements in the UK's European Market Infrastructure Regulation (UK EMIR) would be replaced and restated partly in new UK legislation or in the BoE's new CCP rules.

The draft Central Counterparties (Amendment) Regulations 2025 restate certain provisions in the UK European Market Infrastructure Regulation on the authorisation and supervision of CCPs, requirements applicable to CCPs and provisions regarding overseas CCPs, including "location regulations". These changes will be made by amending the Financial Services and Markets Act 2000 and the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 as well as the draft Financial Services (Overseas Recognition Regime Designations) Regulations 2025.

The draft Financial Services and Markets Act 2000 (Criteria for Determining Systemic Importance of Overseas Central Counterparties) Regulations 2025 set the criteria that the BoE must consider when determining whether an overseas CCP is of systemic importance to the financial stability of the UK. The policy paper provides further detail on the two draft SI. The deadline for technical comments on the draft SI' is 18 November. The draft SI' should be considered with the BoE's proposed CCP rulebook, which will be issued for consultation on 18 July. HMT is expected to lay the legislation before Parliament in 2026.

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