Derivatives clearing after Brexit


Following Brexit on 29 March 2019, the United Kingdom will become a "third country". Financial and other companies domiciled in the EU will then no longer be able to easily fulfil their obligation to clear derivatives with "central counterparties" (CCPs) in London. In a cepAdhoc, short and medium-term EU priorities for derivatives clearing are analysed.


In the short term, the EU has a strong interest in ensuring that European counterparties can clear their derivatives in London even after Brexit in order to maintain financial market stability. For both cases of a hard and a soft Brexit, cep sets out which regulatory changes should be made to allow for this. In the medium term, the EU must create a centralised EU supervision of CCPs and coordinate their restructuring and settlement closely with the banking supervisory and resolution authorities of the Eurozone.