ESMA Extends Application of Recognition Decisions for Three UK CCPs

The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, has announced its decision to extend the application of the recognition decisions for the three CCPs established in the United Kingdom.

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CCPs are a market infrastructure, which reduces systemic risk and enhances financial stability by standing between the two counterparties to a derivatives contract and thereby reducing the risk for both. Thus, their services are crucial in the financial market.

On 22 March 2022, ESMA amended the recognition decisions and tiering determination decisions in respect of the three recognised UK CCPs – ICE Clear Europe Ltd, LCH Ltd and LME Clear Ltd – that were adopted by ESMA on 25 September 2020, to align them with the Commission Implementing Decision (EU) 2022/174 adopted by the European Commission on 8 February 2022.

Accordingly, the application of the recognition decisions and tiering determination decisions in respect of ICE Clear Europe Ltd, LCH Ltd (as Tier 2 CCPs) and LME Clear Ltd (as a Tier 1 CCP) has been temporarily extended until 30 June 2025.