In a significant move for third-country Central Counterparties (CCPs), the United Kingdom has extended its Temporary Recognition Regime (TRR). The Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2023, which were put into effect on September 13, 2023, will now enter into force on November 1, 2023. This extension of the U.K.’s TRR for third-country CCPs will last until December 31, 2025.
The TRR permits these third-country CCPs to continue offering their clearing services in the U.K., until either full recognition or equivalence decisions are concluded. This move ensures stability for the services of these CCPs by providing a buffer period during which their full recognition or equivalence can be decided.
This transitional provision forms part of the wider Financial Services and Markets Act 2023. Details of these broader regulations can be found in the original article, hosted on JD Supra and compiled by Shearman & Sterling LLP. In summary, this extension serves not only the interest of the third-country CCPs but also contributes towards maintaining the robustness of the U.K.’s financial market infrastructure.