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Well-oiled QCCP deadline delay

In a meeting held 23 November 2015, the European Banking Committee of the European Commission reached a consensus on a fourth extension of the QCCP deadline.

The transitional period relates to own funds requirements for exposures to central counterparties under CRR, where CCPs established in a third country not yet recognised under EMIR are nonetheless viewed as a QCCP for regulatory capital purposes.

Dealing with CCPs stripped out of this temporary QCCP mantle would instantly become prohibitive for clearing members subject to CRR. US CCPs in particular would feel the cold bite.

The original deadline of 15 June 2014 was delayed to 15 December 2014, then to 15 June 2015, 15 December 2015 and now imminently to 14 June 2016 via implementing acts.

Summary records of the meetings of the European Banking Committee consistently note the Commission and ESMA`s progress on this issue and advocate for the necessity of the delay.

A member of the Committee has already questioned the legal basis of granting more than one extension, presumably on the basis that the text refers to an implementing act, rather than implementing acts. The Commission was entitled under CRR to: “adopt an implementing act … extending the transitional provisions … by a further six months, in exceptional circumstances where it is necessary and proportionate to avoid disruption to international financial markets”.

In the context of the modern regulatory environment beset and burdened with constant delay, the singular could include the plural. The only question is how many times.

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