As part of the legislative trialogue in connection with the EMIR review, the Council of the European Union has updated a proposal that, among other things, relates to systemically significant foreign central counterparties ("CCPs") and increases the powers of European Securities and Markets Authority ("ESMA") and the European Central Bank, especially in determining the cross-border dimensions of CCP authorization and operation.
As previously covered, U.S. regulators oppose this proposal as infringing on U.S. supervisory authority over U.S. CCPs, and as likely resulting in market fragmentation. The imposition of CCP supervisory committees/colleges raises concerns regarding the length of the decision-making process. Further, the ability of ESMA to decline recognition of third-country CCPs that are systematically important - which remains in this proposal - continues to be an issue for UK and U.S. platforms.
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