The Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2023

Statutory Instruments

2023 No. 999

Financial Services

The Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2023

Made

13th September 2023

Laid before Parliament

14th September 2023

Coming into force

1st November 2023

The Treasury make these Regulations in exercise of the powers conferred by Article 497(3) of Regulation (EU) 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation No 648/2012(1) (the “Capital Requirements Regulation”), and by regulation 18(2) of the Central Counterparties (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018(2) (the “CCP Regulations”).

The Treasury are satisfied that it is necessary and proportionate to extend the transitional provisions in paragraph 1 of Article 497 of the Capital Requirements Regulation in order to avoid disruption to international financial markets, and that it is necessary and proportionate to extend the temporary recognition period in regulation 18(1) of the CCP Regulations in order to avoid disruption to the financial stability of the United Kingdom.

Citation, commencement and extent

1.—(1) These Regulations may be cited as the Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2023.

(2) These Regulations come into force on 1stNovember 2023.

(3) These Regulations extend to England and Wales, Scotland and Northern Ireland.

Extension of the transitional period for third-country central counterparties under Article 497 of Regulation (EU) 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation No. 648/2012

2.  In Article 497 (own funds requirements for exposures to CCPs) of Regulation (EU) 575/2013(3), the transitional period referred to in paragraph 1(b)(ii)(4) is extended by 12 months so that it ends four years after the date of the submission of the application.

Amendment to the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018

3.  In regulation 18(1) (temporary deemed recognition period) of the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018(5), for “four years” substitute “five years”.

Scott Mann

Stuart Anderson

Two Lords Commissioners of His Majesty’s Treasury

13th September 2023

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations extend transitional provisions provided for in Regulation (EU) 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (the “Capital Requirements Regulation”) and the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 (the “CCP Regulations”) as extended by the Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2022.

These Regulations extend the transitional provisions in relation to central counterparties which are established outside of the United Kingdom.

Regulation 2 provides that the transitional period provided for in Article 497(1)(b)(ii) of the Capital Requirements Regulation is extended by 12 months. Article 497(1)(b)(ii) sets out this transitional period for overseas central counterparties which have applied to be recognised by the Bank of England after 27 June 2019.

Regulation 3 amends regulation 18(1) of the CCP Regulations, which provides the temporary recognition period for overseas central counterparties within the temporary recognition regime established by those Regulations. It extends this temporary recognition period by 12 months.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen. A de minimis impact assessment is available from HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ and is published with the Explanatory Memorandum alongside this instrument at www.legislation.gov.uk.

(1)

EUR 2013/575.

(2)

S.I. 2018/1184.

(3)

As amended by S.I. 2019/1232, 2021/1078 and 2022/1244.

(4)

This transitional period was extended by S.I. 2022/1244 to end three years after the date of submission of the application.

(5)

As amended by S.I. 2020/56 and 2022/1244.