The European Securities and Markets Authority (ESMA) declared on Monday that in case the UK left the EU with no deal, it would authorize three central counterparties from the UK to operate in the EU legally. The three CCPs are LCH Limited, LME Clear Limited and ICE Clear Europe Limited, which are all registered and headquartered in the UK.
The Intercontinental Exchange (NYSE: ICE) revealed that its European central counterparty business ICE Clear Europe had already been recognized by ESMA as a third-country central counterparty in case of a hard Brexit.
The company met the stringent conditions set out in Article 25 of the European Market Infrastructure Regulation (EMIR), which was why ESMA saw it fit to recognize the company. The recognition shall come into effect if the UK does not secure a deal with European Union leading to a hard Brexit.
The President of ICE Clear Europe, Finbarr Hutcheson commented that:
We are pleased to receive this recognition, which means that ICE Clear Europe can continue to service all its clearing members and customers, including those based in the EU, in the event of the UK leaving the European Union without a withdrawal agreement.
He also lauded the pertinent regulatory authorities saying:
We thank the European Commission, Bank of England, and European Securities and Markets Authority (ESMA) for its work securing this recognition and, in doing so, removing any uncertainty around the ability of EU-based market participants to access ICE Clear Europe.