The European Securities and Markets Authority (ESMA) will recognise three London clearing houses in the event of a No-Deal Brexit. Anna Tobin reports
If the UK leaves the EU without a deal, the ESMA has confirmed that three UK central counterparties (CCPs) – LCH Limited, ICE Clear Europe Limited and LME Clear Limited – will be recognised and be able to provide their services in the EU. This action has been taken to limit the risk of disruption in central clearing and to avoid any negative impact on the financial stability of the EU.
The three CCPs will be recognised as third country CCPs with immediate effect in the event of a no-deal Brexit. This announcement ensures that the clearing houses will be able to continue working within Europe even without a Withdrawal Agreement and it will provide some relief to the City of London.