On November 14, the European Banking Committee (Committee) of the European Commission (EC) voted to extend the December 15 transitional deadline under the EU Capital Requirements Regulation (CRR). If the extension had not been granted, EU banking groups clearing on central counterparties (CCPs) that had not been authorized or recognized by the European Securities and Markets Authority (ESMA) as qualifying central counterparties (QCCPs) would have had to begin applying higher capital charges in accordance with the CRR.  

The Committee noted that the authorization process for CCPs established in the European Union had commenced, but that the process would not be completed by December 15. Although many CCPs established outside of the European Union have applied for recognition, the Committee noted that none have currently been recognized. Before any such third-country CCP can be recognized as a QCCP, the EC must first make a determination that the regulation in the applicable CCP’s home jurisdiction is equivalent to that of the European Union. The EC recently made equivalency determinations for Australia, Hong Kong, Japan and Singapore. Details of the four equivalency determinations were reported in the Corporate and Financial Weekly Digest edition of October 31, 2014 (“European Commission Adopts First Equivalence Decisions for Non-EU CCPs“). 

The implementing regulation for the transitional extension of the CRR can be found here.