ESMA To Recognise UK CSD Post-Brexit03.01.2019
The European Securities and Markets Authority (ESMA) has today announced that, in the event of a no-deal Brexit, the Central Securities Depository (CSD) established in the United Kingdom (UK) – Euroclear UK and Ireland Limited – will be recognised as a third country CSD to provide its services in the European Union (EU).
🆕 ESMA to recognise the UK Central Securities Depository in the event of a no-deal Brexit
ℹ️ESMA continues Brexit preparations – decision will allow the UK CSD to serve Irish securities and to avoid any negative impact on the Irish securities market pic.twitter.com/AOaiqlCwT0
— ESMA (@ESMAComms) March 1, 2019
ESMA has adopted this recognition decision in order to allow the UK CSD to serve Irish securities and to avoid any negative impact on the Irish securities market. ESMA has previously communicated that its Board of Supervisors supports continued access to the UK CSD.
Having assessed the application and the information submitted by the UK CSD, and consulted the relevant authorities in accordance with the Central Securities Depositories Regulation (CSDR), ESMA considers that the conditions for recognition under Articles 25 of CSDR are met by the UK CSD in case of a no-deal Brexit. Therefore, it has adopted a decision to recognise the UK CSD as a third-country CSD under the CSDR.
The recognition decision would take effect on the date following Brexit date, under a no-deal Brexit scenario.
Review of trading desks found that incoming banks did not yet retain full control of their balance sheets.
UK has a greater market share than pre-Brexit for on-venue execution of GBP interest rate swaps.
Recognition has been temporarily extended until 30 June 2025.
The trade repository has been providing UK services since the first business day after Brexit on 4 Jan 2021.
European firms could operate temporarily in the UK after Brexit while seeking full authorisation.