EU's failure to approve foreign CCPs could disrupt market, leading lawyers warn
The industry faces a "Clearing Cliff" if the European
Commission does not grant recognition to non-EU clearing
houses by December 15, top international lawyers have
After December 15, EU financial institutions that are
members of non-EU clearinghouses could face huge increases in
capital requirements to clear at those CCPs rendering it
uneconomic for them to do so.
Under the Capital Requirements Regulation, which came into
force this year, EU institutions that are members of foreign
CCPs not recognised as a Qualified CCP under Article 25 of the
European Markets Infrastructure Regulation will face punitive
capital requirements against those exposures.
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