UK equivalence regulations for Swiss CCPs and margin for OTC derivatives not centrally cleared

The OTC Derivatives Risk Mitigation and Central Counterparties (Equivalence) (Switzerland) Regulations 2025 have been laid before Parliament and published with an explanatory memorandum. The Regulations, made on 16 July, grant equivalence to Switzerland's regulatory regimes for over-the-counter (OTC) derivatives and central counterparties (CCPs). The equivalence decision enables UK firms to rely on Swiss risk mitigation standards for OTC derivative contracts, subject to certain conditions being met, and allow Swiss CCPs to provide clearing services in the UK, subject to the CCP being recognised by the Bank of England (BoE). This removes duplicative regulatory requirements and supports cross-border financial market access as expressed under the Berne Financial Services Agreement (BFSA). The equivalence determinations were made following assessments by HM Treasury, with input from the UK Financial Conduct Authority, UK Prudential Regulation Authority and BoE, and are part of the UK's broader move to replace EU-inherited equivalence regimes with tailored Overseas Recognition Regimes. The Regulations enter into force on 1 January 2026.  The draft Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025, which have also been laid before Parliament, will implement other aspects of the BFSA. You may like to watch our webinar of 3 July in which our lawyers discuss the BFSA.

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