UK regulations made to extend transitional regimes for overseas CCPs

The Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2025 have been made and published alongside an explanatory memorandum. The Regulations extend key transitional provisions for the temporary recognition regime (TRR) for overseas central counterparties (CCPs) and for exposures to CCPs. First, the Regulations amend regulation 18 of the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 to extend to 31 December 2027 the TRR. This means that overseas CCPs that are in the TRR may continue offering clearing services in the UK while their recognition applications are being assessed by the Bank of England. It will also allow time for the revisions to the UK's regime for UK and overseas CCPs to be finalised.

Secondly, the Regulations extend the transitional regime for overseas qualifying CCPs (QCCPs) under the UK Capital Requirements Regulation by 12 months. The expiry date of the QCCP transitional regime varies depending on when each CCP applied for recognition in the UK, but the explanatory memorandum confirms that for a significant proportion of firms, the current expiry date is 31 December 2025. The extension aims to prevent UK firms with indirect exposures to CCPs within the regime from facing a sudden and disruptive increase in capital requirements upon expiry of the QCCP transitional regime. As part of broader efforts to modernise the UK's regulatory framework for domestic and overseas CCPs, the government has already announced proposed changes to the criteria for determining when an overseas CCP qualifies as a QCCP, alongside plans to introduce a permanent regime to replace the current transitional QCCP arrangements.

The Regulations will enter into force on 28 November. HM Treasury has previously extended the temporary recognition regime and the QCCP transitional regime three times, each by 12 months.

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