European firms that are members of non-European clearing houses face extras costs from December
The industry faces a "Clearing Cliff" if the Europe does not
grant recognition to non-EU clearing houses by December 15, top
international lawyers have warned.
After December 15, EU financial institutions that are
members of non-EU central counterparties 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
European Markets Infrastructure Regulation will face punitive
capital requirements against those exposures.
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