FIA supports 12 month extension to QCCP transitional period

21 May 2021

FIA has responded to the European Commission’s consultation on the Implementing Regulation to extend the qualifying central counterparty (QCCP) transitional period under the Capital Requirements Regulation II (CRR). FIA fully supports the extension, which will avoid disruption to international financial markets.

According to FIA’s response, the extension of the QCCP transitional period is key to ensuring continuous access to markets and global competitiveness of EU banks and impacted investment firms. As FIA members engage in cross-border transactions in derivatives markets, we recognize the need to achieve a regulatory level playing field across multiple jurisdictions. It will also give ESMA additional time to complete outstanding applications for recognition of TC-CCPs.

The European Commission proposed to extend by 12 months (until 28 June 2022) the transitional period during which institutions can treat exposures to a third-country CCP awaiting recognition by ESMA as if they were recognized CCP exposures. The extension will prevent institutions established in the EU or their foreign subsidiaries from being subjected to higher "own funds" requirements during the recognition process.

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