Hard Brexit Impact Analysis

Page 43 of 106 Category If no agreement is reached: Consequence EU Document Finance post trade services DERIVATIVES: As of the withdrawal date The loss of EU authorisation of CCPs established in the United Kingdom will affect their ability to continue performing certain activities (e.g. compression) and fulfilling certain obligations (e.g. default management) with regard to contracts concluded before the withdrawal date. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF POST-TRADE FINANCIAL SERVICES Finance post trade services DERIVATIVES: As of the withdrawal date A higher capital charge will apply to exposures resulting from positions in derivatives held by credit institutions and investment firms established in the EU in non- recognised CCPs established in third countries. This is because only authorised CCPs established in the EU and recognised CCPs established in a third country are qualifying CCPs (QCCPs) which have a favourable treatment under CRR. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF POST-TRADE FINANCIAL SERVICES Finance post trade services DERIVATIVES: Before the withdrawal date Counterparties in the EU and counterparties in third countries to which the clearing obligation applies should therefore examine their derivatives portfolios. All counterparties (including counterparties established in third countries), be they financial institution or a non-financial company above the clearing threshold, should ensure that they fulfil the clearing requirements. Where derivatives are concluded via an intermediary or cleared via an intermediary (i.e. clearing member, client of a clearing member or an indirect client), counterparties should ensure that their contract with that intermediary duly complies with the applicable legal requirements. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF POST-TRADE FINANCIAL SERVICES Finance post trade services TRADE REPOSITORIES AND REPORTING: As of the withdrawal date, trade repositories established in the United Kingdom will be third- country trade repositories. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF POST-TRADE FINANCIAL SERVICES