Euroclear UK & Ireland to apply to ESMA for recognition as third country CSD

Euroclear, Euroclear UK & Ireland's (EUI's) parent company, has previously communicated that from the expiry of the post-Brexit transition period (scheduled for 31 December 2020), EUI needs third country Central Securities Depository(CSD) recognition pursuant to the CSD Regulation (CSDR) in order to continue to provide Irish Securities Settlement and Relevant Depository Interest (DI) Settlement. 

The recognition process includes three steps: an implementing act of the European Commission (EC); a subsequent application from EUI to the European Securities Market Authority (ESMA); and a decision from ESMA.

On November 25, 2020, the EC decided to adopt an implementing act determining the legal and supervisory requirements for UK CSDs as equivalent to those in the EU. This implementing act is time limited to the end of June 2021. Following publication of the EC implementing act, EUI will formally apply to ESMA seeking recognition as a third country CSD under Article 25 of CSDR in respect of Irish Securities Settlement and Relevant DI Settlement. Euroclear will continue to work with ESMA with regards to the application and await their decision. 

EUI intends to issue updates in relation to the recognition process. EUI will continue to work together with stakeholders, particularly registrars, participants and issuers, to define and agree the required operational steps, timing and other relevant information.

Euroclear is a Belgium-based financial services company that specializes in the settlement of securities transactions as well as the safekeeping and asset servicing of these securities. It was founded in 1968 as part of J.P. Morgan & Co. to settle trades on the then developing eurobond market.