HM Treasury has introduced two technical amendments to the Financial Services and Markets (FSM) Bill which, if approved by Parliament, will help to facilitate the continued use of certain non-UK CCPs which are currently due to exit the CCP run-off regime with effect from 1 July 2023.
The Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Bank of England have welcomed the proposed amendments. The FCA and PRA are responsible for the regulated banks that use central counterparty services, while the Bank of England supervises CCPs themselves.
“The regulators recognise and fully support the intention to facilitate the continuity of these clearing services to UK firms consistent with the original amendment tabled for these purposes in January 2023,” said the regulators in a joint statement on 26 May.
“The regulators continue to work together towards this aim, having regard to their respective duties. In the event of a gap between 1 July and Royal Assent, the regulators will take a proportionate and risk-based approach when giving consideration to the use of their supervisory powers in relation to firms that may be impacted pending Royal Assent.”
The amendments will allow UK banks to continue using third country CCPs, even after the July deadline.
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