Clearing industry faces cliff edge after Brexit

Author: Olly Jackson | Published: 27 Sep 2018

Equivalence will be one way for the UK to avoid the Brexit cliff edge including in the clearing sector. This has become even more important given ongoing concerns that the UK and EU will be unable to reach a deal in time, and that the EU is yet to come up with a reciprocal scheme to the temporary recognition regime (TRR) proposed by the Bank of England.

"The equivalence model is the best outcome so that both sides are aligned," said a spokesperson at a UK-based clearing house. "The UK needs independence rather than simply being a rule taker, whereas on the other hand regulatory alignment is necessary; equivalence best complements this balance."

European chief negotiator Michel Barnier said the deadline for a deal has been extended to the end of November at the very latest, but concerns are mounting that no deal will be agreed in time....