Central counterparty

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Revision as of 14:38, 1 March 2018 by Doug Williamson (Talk | contribs) (Expand. Sources: FCA webpages https://www.fca.org.uk/news/speeches/future-city, https://www.fca.org.uk/news/statements/statement-transitional-arrangements-trading-venues-under-mifir-article-542)

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A financial institution that acts as an intermediary between market participants including corporate treasuries.

The CCP must be duly recognised by the regulator in its jurisdiction.

UK central counterparties recognised by the Bank of England include:

  • CME Clearing Europe Limited
  • LCH.Clearnet Limited
  • LME Clear Limited

Most central counterparties are clearing houses.

Also sometimes known as 'central clearing parties'.

Brexit, central counterparties, stability risks and costs

"... If we turn to central counterparties (CCPs), if the UK leaves the EU without mitigating action on both sides, EU and UK CCPs could find they are in breach of regulation by providing clearing services in the other’s jurisdiction.
This would apply to maintaining existing positions as well as taking on new positions. This would require abrupt close-out of positions, with attendant financial stability risks and costs to real economies.
I would add that this risk is more acute for EU users because of the volume of activity conducted in UK CCPs."
Andrew Bailey, chief executive, Financial Conduct Authority, February 2018.

See also

External links

Andrew Bailey, Financial Conduct Authority (FCA), The Future of the City

FCA agrees transitional arrangements for ICE Futures Europe and the LME