The European Securities and Markets Authority (ESMA) has officially recognised Canada’s national securities depository, CDS Clearing and Depositary Services (CDSC), as a Tier 1 central counterparty (CCP) under the European Markets Infrastructure Regulation (EMIR). This decision brings CDSC into the fold of third-country CCPs eligible to operate within the EU according to an ESMA press release.
This recognition follows an equivalence decision made by the European Commission in November 2015, which acknowledged the regulatory framework for CCPs in certain Canadian jurisdictions, including British Columbia, as being on par with EU standards.
The approval was facilitated by a Memorandum of Understanding (MoU) signed between ESMA and the British Columbia Securities Commission (BCSC) on 18 July. The MoU sets out the terms for cooperation, including information exchange, for Canadian CCPs authorised or recognised by the BCSC that seek recognition under EMIR.
26 cooperation arrangements
ESMA’s new agreement with the BCSC adds to its existing MoUs with other Canadian regulators, such as the Ontario Securities Commission and Québec’s Autorité des Marchés Financiers. In total, ESMA has now established 26 cooperation arrangements under EMIR with supervisory authorities from 21 non-EU countries, including major financial markets like the US, UK, and New Zealand.
These arrangements are crucial for ensuring that non-EU CCPs, whose regulatory frameworks are deemed equivalent by the European Commission, can operate within the EU under the oversight of ESMA.
