On Thursday 24 June, the European Commission extended – by one additional year – the current transitional regime regarding the capital requirements that EU banks and investment firms must maintain when exposed to non-EU central counterparties (CCPs), which are not recognised by the European Securities and Markets Authority (ESMA), to benefit from reduced capital requirements.
This transitional regime will therefore continue to apply until 28 June 2022. Nevertheless, the Commission has announced that this is to be the last extension permitted by the Capital Requirements Regulation (CRR).
“Today's decision gives us a bit more breathing space while we continue to work on equivalence decisions. It also gives EU banks and investment firms sufficient time to properly prepare for the possibility of higher capital charges”, said Mairead McGuinness, EU Commissioner responsible for financial services, in a statement.
CCPs in Argentina, Chile, China, Colombia, Indonesia, Israel, Malaysia, Russia, Taiwan, Thailand and Turkey and the United States of America currently benefit from that transitional regime.
An equivalence decision by the Commission is a prerequisite for ESMA to recognise a non-EU CCP from a third country. (Original version in French by Marion Fontana)