On June 5, the Futures Industry Association (FIA) published a report summarizing the responses to its latest survey and setting out its recommendations to United Kingdom (UK) and European Union (EU) policymakers. The survey concerns Brexit implementation plans for the client clearing businesses of FIA members.

According to the FIA’s report, the clearing members identified business continuity as the priority, with retention of access to clients and market infrastructure being key. While the UK Prudential Regulation Authority has indicated that the United Kingdom is unlikely to prohibit UK firms from membership of central counterparties (CCPs) based in the remaining EU member states after Brexit (EU27), the absence of reciprocal confirmation from the European Commission has caused some concern.

The FIA recommends the following:

  1. The European Commission confirms whether, and from when, UK firms may be permitted to benefit from the third-country passport;
  2. The European Commission confirms whether, and from when, UK CCPs will be capable of recognition under the European Market Infrastructure Regulation;
  3. The European Commission confirms that UK CCPs will retain their qualifying central counterparty status under the EU Capital Requirements Regulation;
  4. The European Commission confirms whether EU27 CCPs will be able to continue to service UK clearing members and clients;
  5. The United Kingdom and EU27 each confirm whether the United Kingdom will continue to participate in the EU Emissions Trading Scheme during the Brexit transition period and whether it will adopt a domestic version of the scheme thereafter; and
  6. The United Kingdom confirms whether and when it will implement a domestic version of the EU’s Regulation on Wholesale Energy Market Integrity and Transparency regulation.

The FIA’s report is available here.

The FIA’s accompanying press release is available here.