The European Commission has extended the transitional deadline regarding the requirements under the Capital Requirements Regulation and EMIR. The extension now permits institutions to consider a CCP as a qualifying CCP (QCCP) for an additional period to 15 December 2014. A QCCP is a CCP which has not yet been authorised / recognised as a CCP under EMIR.

The CRR had provided (Article 497) that institutions had a period of 15 months after the date of entry into force of relevant EMIR RTS to consider a CCP which had as not yet been authorised / recognised as a QCCP. Article 497(3) enabled the European Commission to extend this period by 6 months “in exceptional circumstances where it is necessary and proportionate to avoid disruption to international financial markets”.

The Commission, in making the extension, noted that the process for authorisation / recognition of CCPs was ongoing. It further acknowledged that, if an extension was not granted, it would result in EU institutions (and their non-EU subsidiaries) seeing a significant and burdensome increase in their own funds requirements for the purposes of CCP exposure calculation, and could result in their withdrawal from markets thereby causing market disruption. This extension does not apply to CCPs that have already received authorisation.

Contributed by Catharine Dwyer