Thursday, April 03, 2014 9:22:39 AM

EMIR approval creates opportunities for EuroCCP

EuroCCP has received authorisation under the European market infrastructure regulation (EMIR), the second central counterparty (CCP) to receive the green light from regulators.

The interoperable cash equities clearing house received its authorisation from De Nederlandsche Bank (DNB), its EMIR national competent authority, meaning it fully complies with EMIR’s requirements for CCPs.

To gain authorisation, EuroCCP needed to demonstrate it had robust risk management, governance and capital to cope with the event of a member default as part of tough new safety requirements for CCPs.

By gaining authorisation from not only DNB but a college of 19 regulators and the European Securities and Markets Authority (ESMA), EuroCCP will be able to do business in any EU member state, which Diana Chan, CEO of EuroCCP, said will increase its business opportunities.

“Receiving authorisation under EMIR gives us a passport to operate anywhere in the EU. Previously, in Germany and France, CCPs had to have a banking licence to operate due to national regulations,” she explained.

“Now, we will be able to offer clearing of German equities traded on Equidict, which we already clear for in other jurisdictions, and we can also clear for French venues.”

EuroCCP is the second CCP to receive authorisation under EMIR. Nasdaq OMX Clearing was the first, and received the green light from European regulators on 19 March, starting a countdown for ESMA to develop its clearing obligations for OTC derivatives.