Brexit

ESMA recognises Euroclear UK & Ireland as third country CSD

Euroclear UK & Ireland is pleased to confirm that the European Securities and Markets Authority (ESMA) has recognised Euroclear UK & Ireland as a third country CSD in accordance with Article 25 of the EU CSD Regulation.

This ensures that Euroclear UK & Ireland will be able to continue its Irish securities settlement services after March 2019 in a no-deal Brexit scenario. Euroclear UK & Ireland's recognition will apply from 30 March 2019 to 30 March 2021, by which time it is expected that the Irish securities market will have migrated to Euroclear Bank.

Euroclear UK & Ireland is working with the European Central Bank and the Central Bank of Ireland regarding continued euro settlement services in a no-deal Brexit scenario and will update clients in due course.


Working Group and Steering Board

The Euroclear group is working with a wide group of stakeholders to secure continuity of settlement for Irish corporate securities post-Brexit. Euroclear UK & Ireland continues its engagement with the relevant authorities to ensure it can continue to service the Irish market in the period immediately following the UK leaving the European Union.

Euronext Dublin announced in December 2018 that Euroclear Bank was its preferred provider of a long term settlement solution for Ireland when Euroclear UK & Ireland would no longer be able to act as CSD in Ireland.

Therefore, Euroclear Bank has set up a Working Group to undertake a detailed market consultation on the operating model for it to become the CSD for Irish corporate securities in the longer term, to be implemented within the deadlines set by the Brexit process.

The Working Group consists of representatives from each market constituency impacted by the change of CSD. A list of its members can be found in the terms of reference. We will update this page with the findings of the Working Group following each meeting. Interested parties should contact their market representative for information or to give input into the Working Group process.

At the same time, Euroclear has established a senior Irish Steering Board to oversee that the proposed solution is in the interest of the Irish market as a whole, with particular attention to risk, efficiency and a timely delivery of the proposed solution. 

We aim to publish a White Paper describing the Operating Model for Euroclear Bank as the long term CSD solution for Irish corporate securities in March 2019. 


Continued provision of Irish securities and euro settlement

It is our intention to continue providing services in respect of Irish securities and euro settlement following Brexit, including in a no-deal scenario, for as long as we are permitted to do so. We have been engaging with domestic and European authorities to seek this continuity of service provision.

We welcome the publication, on 19 December 2018, by The European Commission of its UK CSD equivalence implementing decision. In a no-deal scenario, the decision provides for equivalence of UK CSD arrangements for a period of 24 months from March 2019, and is a positive step towards enabling The European Securities Market Authority (ESMA) to recognise Euroclear UK & Ireland as a ‘third country CSD’.

We are preparing our application for EU third country CSD recognition and are engaging with ESMA regarding this process. Subject to this application process, regulatory approvals and circumstances which remain outside of our control, we expect this recognition would be granted and become effective in the event of a no-deal Brexit. This would ensure that Euroclear UK & Ireland could continue to settle Irish securities after 29 March 2019.

We continue to engage with the relevant authorities regarding the continued provision of euro settlement services.

In parallel and following Euronext’s announcement that Euroclear Bank is its preferred solution for long term settlement of Irish corporate securities, Euroclear Bank is starting a detailed consultation to finalise the operating model for Euroclear Bank, with the aim of having the long term solution in place by the expiry of the equivalence period.


Brexit briefing paper - Euroclear group CSDs

The purpose of this briefing is to provide an overview of the impact of Brexit on the Euroclear group CSDs.


Consultation Paper - Potential Brexit Impacts: Irish Securities Settlement and Euro Settlement

We have published a consultation paper to provide further information to, and seek the views of, stakeholders in relation to Euroclear UK & Ireland's ability to offer settlement of Irish securities and settlement of euros after Brexit.

Consultation feedback

You are encouraged to respond to the questions set out on page 4 of the consultation paper.

In particular, we are interested to hear about:

  • any potential action you may be considering in relation to the potential impact of Brexit upon Irish Securities Settlement or Euro Settlement, or
  • any support that you may wish to receive from Euroclear UK & Ireland (or the wider Euroclear group) in connection with the potential impact of Brexit upon Irish Securities Settlement or Euro Settlement

All responses should be sent by email to: consultationfeedback@euroclear.com quoting EUI Potential Brexit Impacts, in the subject line of your email. You can also provide your feedback to your Relationship Manager.


White Paper: Irish securities settlement post-Brexit

In February 2018, Euroclear published a White Paper "Euroclear Ireland – Delivering continuity of Irish securities settlement post Brexit". This paper described the proposed structure and services of a new post-Brexit CSD in Dublin for Irish corporate securities, to be called ‘Euroclear Ireland’, which would need to be authorised and regulated, including by the Central Bank of Ireland under the EU CSD Regulation.

In this White Paper we noted that, while Euroclear had made a decision in principle to seek to establish a new CSD in Ireland, the establishment of ‘Euroclear Ireland’ was subject to a number of factors outside Euroclear’s control including approval by stakeholders and regulators. In addition, the continued uncertainty over the precise nature of the UK’s relationship with the EU after March 2019 meant that it was possible that other solutions, delivered to different time-lines, might also be appropriate.

Following recent discussions with the Central Bank of Ireland and the Bank of England, Euroclear has ceased work on the development of ‘Euroclear Ireland’ as originally proposed and will now pursue alternative solutions for Irish securities settlement.

Euroclear UK & Ireland’s intention is to continue to offer settlement services in respect of Irish securities against euro, sterling and dollars on an interim basis after March 2019. This is subject to dependencies outside Euroclear’s control including regulatory approvals and Euroclear is working with relevant authorities in this respect. We note however, that the Agreement on 23 March 2018 between the EU and UK on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union ('The Withdrawal Agreement') contains a 21 month Implementation or Transition Period.

Euroclear will now explore other potential settlement solutions for Irish securities. To that end, Euroclear will work with the authorities and with its Irish User Committee and other stakeholders over the coming weeks to consult on, and develop further, these longer term options for Irish securities settlement.

Questions?

For any questions, we encourage you to contact your Euroclear Relationship Manager