ESMA AGREES NO-DEAL BREXIT MOUS WITH THE BANK OF ENGLAND FOR RECOGNITION OF UK CCPS AND THE UK CSD

04 February 2019

  The European Securities and Markets Authority (ESMA) has agreed Memoranda of Understanding (MoUs) with the Bank of England (BoE) for the recognition of central counterparties (CCPs) and of  the central securities depository (CSD) established in the United Kingdom (UK), that would take effect should the UK leave the European Union (EU) without a withdrawal agreement, the no-deal Brexit scenario.

ESMA has previously communicated, in its public statements of 23 November and 19 December 2018, that its Board of Supervisors supports continued access to UK CCPs and to the UK CSD, in order to limit the risk of disruption in central clearing and to avoid any negative impact on the financial stability of the EU. It will also allow the UK CSD to continue to serve Irish securities, and to limit the risk of disruption to the Irish securities market.

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ESMA CLARIFIES THE REPORTING AND HANDLING OF DERIVATIVES DATA IN CASE OF NO-DEAL BREXIT

01 February 2019

 The European Securities and Markets Authority (ESMA) has issued today a public statement on how derivatives data reported under the European Market Infrastructure Regulation (EMIR), should be handled in the event of the United Kingdom (UK) leaving the European Union (EU) without a withdrawal agreement, the no-deal Brexit scenario.

EMIR mandates the reporting of all derivatives to ESMA supervised Trade Repositories (TRs), who centrally collect and maintain the records of all derivative contracts. EMIR requires both counterparties to a derivative contract to report its details to TRs.

However, UK counterparties would not be mandated to report under EMIR to EU27 TRs following a no-deal Brexit. Therefore, the statement clarifies the following aspects for different reporting scenarios, namely where both counterparties are from the EU27, both are from the UK, and where one is from EU27 and the other from the UK. The statement clarifies:

  • Reporting by CCPs and counterparties;
  • Reconciliation and recordkeeping by TRs;
  • Access by EU27 authorities;
  • Portability and aggregation by TRs.

The statement also sets out the timeline for completion of the relevant adjustments by the EU27 TRs.

ESMA AND EU SECURITIES REGULATORS AGREE NO-DEAL BREXIT MOUS WITH FCA

01 February 2019

 The European Securities and Markets Authority (ESMA) and European securities regulators have agreed Memoranda of Understanding (MoUs) with the Financial Conduct Authority (FCA) of the United Kingdom (UK).

The MoUs form part of authorities’ preparations should the UK leave the EU without a withdrawal agreement, the no-deal Brexit scenario. The MoUs will therefore only take effect in the event of a no-deal Brexit scenario. The MoUs are similar to those already concluded on the exchange of information with many third country supervisory authorities.

The MoUs are:

1.    an MoU between ESMA and the FCA concerning the exchange of information in relation to the supervision of credit rating agencies (CRAs) and trade repositories (TRs). The MoU will allow ESMA to continue to discharge its mission and meet its mandate regarding investor protection, orderly markets and financial stability in the EU; and

2.    a multilateral MoU (MMoU) between EU/EEA securities regulators and the FCA covering supervisory cooperation, enforcement and information exchange between individual regulators and the FCA, and will allow them to share information relating to, amongst others, market surveillance, investment services and asset management activities. This, in turn, will allow certain activities, such as fund manager outsourcing and delegation, to continue to be carried out by UK based entities on behalf of counterparties based in the EEA.

ESMA Q&AS CLARIFY PROSPECTUS AND TRANSPARENCY RULES IN CASE OF NO-DEAL BREXIT

31 January 2019

 The European Securities and Markets Authority (ESMA) has issued today three Questions and Answers (Q&As) regarding the Prospectus Directive (PD) and the Transparency Directive (TD).

The Q&As clarify the application of certain provisions in these Directives in case the UK withdraws from the European Union (EU) on 29 March 2019 with no withdrawal agreement in place (no-deal Brexit). These Q&As will only apply in case of a no-deal Brexit.

The Q&As provide the following clarifications in the event of a no-deal Brexit:

  • When issuers of equity securities and non-equity securities below 1,000 EUR who currently have the UK as their PD home Member State choose a new home Member State, they should choose between the EU27 Member States / EEA EFTA States in which they have activities after 29 March 2019 (either offers/admissions made after the withdrawal or admissions made before the withdrawal which continue after the withdrawal).
  • Issuers admitted to trading on a regulated market within EU27 / EEA EFTA who currently have the UK as their TD home Member State should choose and disclose their new home Member State without delay following 29 March 2019.
  • As the UK will be a third country, prospectuses and supplements approved by the UK FCA before 29 March 2019 cannot be used in EU27 / EEA EFTA after a no-deal Brexit.

The purpose of the Q&As is to promote common supervisory approaches and practices in the application of the PD and TD in case of a no-deal Brexit.

Source: ESMA