Authorisations

The Bank is responsible for approving FMIs wishing to offer services in the UK

In this section

Application information for UK FMIs

  • A firm must apply to us it if it intends to provide CCP Services in the UK.  Onshored and amended Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation (EMIR)) and the associated Regulatory Technical Standards (RTS) lay down the requirements an applicant must meet and information that must accompany the application. 

    Prospective applicants may wish to contact us at an early stage for advice on the practical aspects of an application. 

    There is no standard application form for recognition as a recognised clearing house that is not a central counterparty (CCP). Section 288 of the Financial Services and Markets Act specifies some details of what must accompany an application. Prospective applicants should contact the Bank of England at an early stage for advice.

    There is no standard application form for overseas CCPs seeking a recognition order under 170B of the Companies Act 1989. Prospective applicants should contact us at an early stage for advice.

    Firms wishing to become a recognised overseas clearing house should contact us at an early stage for advice. Firms can no longer apply for recognised overseas clearing house status if they are a CCP.

  • Part 5 of the Banking Act 2009 (the ‘Act’) sets out a regulatory framework for the supervision of firms operating a payment system that has been recognised, via a recognition order, by HM Treasury (HMT) as being systemically important. Payment system is defined in the Act to include arrangements or proposed arrangements designed to facilitate or control the transfer of money or digital settlement assets. 

    The Act also applies to digital settlement asset service providers (DSA service providers) recognised as being systemically important by HMT. 

    HMT is responsible for deciding which payment systems and DSA service providers are recognised as being systemically important. The criteria to assess whether a payment system or digital settlement asset service provider is deemed systemic are set out in the Act. 

    HMT may recognise a payment system as being systemically important if it is satisfied that any deficiencies in the design of a system, or any disruption of the system’s operation, would be likely to threaten the stability of, or confidence in, the UK financial system, or could have serious consequences for business or other interests throughout the United Kingdom. Similar recognition criteria apply for DSA service providers.  

    In considering whether to recognise a payment system, HMT must have regard to the following considerations specified in the Act: the number and value of the transactions that the system presently processes or is likely to process in the future; the nature of the transactions that the system processes; whether those transactions or their equivalent could be handled by other systems; the relationship between the system and other systems; and whether the system is used by the Bank in the course of its role as a monetary authority.

    Before recognising an existing or prospective payment system or DSA service provider, HMT is required to consult the Bank and in certain cases other regulators such as the Financial Conduct Authority, the Payment Systems Regulator or the Prudential Regulation Authority. The Bank will provide HMT with a recommendation comprising its assessment of the payment system or DSA service provider against the recognition criteria. 

    Under the Act, it is also possible for HMT to apply any of the provisions to service providers in relation to recognised payment systems or DSA service providers where: 

    • Services are provided that form part of the arrangements constituting or connected with the recognised payment system; or
    • Services are provided to the recognised DSA service provider.

    In such cases, the service provider would be specified by HMT in the recognition order made for the recognised payment system or DSA service provider. 

    Firms looking to find out more about the Bank's role in the recognition process should write to  FMIInformation@bankofengland.co.uk.

  • A UK firm must apply to us to be a recognised CSD under the onshored Regulation (EU) No 909/2014 of the European Parliament and the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories (as amended) (UK CSDR), if it intends to provide CSD services in the UK.

    UK CSDR and the associated Regulatory Technical Standards (RTS) lay down the requirements an applicant must meet and information that must accompany the application. 

    Prospective applicants may wish to contact us at an early stage for advice on the practical aspects of an application. 

  • UK law systems (e.g. payment and securities settlement systems) can apply for settlement finality designation and receive settlement finality protections against the operation of the UK insolvency law under the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (as amended). The SFRs seek to reduce the risks associated with participation in these UK law systems by minimising the disruption caused by insolvency proceedings brought against a participant in such a system.

    To receive these protections, systems must meet the criteria set out in the SFRs and be designated by the relevant authority, which is the Bank of England for all entities other than recognised investment exchanges.

    There are different application processes for different types of FMI. UK law private systems should contact us directly by emailing SFD-Enquiries@bankofengland.co.uk.

Application information for non-UK FMIs

Recognition of non-UK CCPs

The Bank is responsible for recognising non-UK CCPs seeking to provide clearing services in the UK. 

The UK has retained the EU framework for recognising non-UK CCPs (known as ‘EMIR 2.2’). As part of this, the Bank has published a Statement of Policy on its approach to determining the level of systemic risk that non-UK CCPs seeking recognition could pose to UK financial stability, known as ‘tiering’. CCPs that are determined as systemically important or likely to become systemically important (‘Tier 2’) by the Bank are required to meet specific UK standards under on-shored EMIR and will be subject to direct supervision by the Bank. The Bank has also published a Statement of Policy on its approach to assessing comparable compliance for non-UK CCPs that have been designated as Tier 2 by the Bank. 

Jurisdictional equivalence and a Memorandum of Understanding with the relevant home authority are required as part of the recognition process. If a CCP’s jurisdiction has not been granted equivalence, their home authority can engage directly with HMT using the following contact: equivalence@hmtreasury.gov.uk. 

A non-UK CCP that is not in the Temporary Recognition Regime (TRR), may submit a formal recognition application to the Bank at any time.

A non-UK CCP that entered the TRR when the UK exited the EU remains in the TRR, provided it applied for recognition by 30 June 2022.

A non-UK CCP that did not apply for recognition by 30 June 2022 automatically entered the run-off regime after that date, meaning that it may continue to offer clearing services in the UK only for a limited amount of time. A non-UK CCP that is in the run-off regime cannot re-enter the TRR, but may apply for permanent recognition at any point after entering the run-off regime.  If a CCP that was in the run-off regime (or had previously been in the run-off regime) were to apply for recognition, this would be treated as a new application.

Tiering forms part of the recognition process for non-UK CCPs. However, as set out in the tiering Statement of Policy, applicant CCPs are not required to submit information in relation to tiering at the point of application. Non-UK CCPs applying for recognition should submit recognition applications in accordance with existing technical standards (as set out in the Update letter sent in October 2018). The Bank will write to non-UK CCPs to request tiering information when it is ready to begin its tiering assessments.

We will ensure that non-UK CCPs are kept informed of relevant developments and they should also refer to the following information sources:

Please feel free to contact us at FMIInformation@bankofengland.co.uk. 

Fees regime for recognised non-UK CCPs

The Bank published a Statement of Policy on 25 November 2022 on its annual fee regime for non-UK CCPs, and revising the existing recognition fee.

Recognition of non-UK CSDs

On 6 December 2018, the UK parliament approved legislation which sets out how a non-UK CSD can continue to provide services in the UK following the UK’s withdrawal from the EU. In parallel, the Bank published a letter to non-UK CSDs, outlining the circumstances in which non-UK CSDs would need to be recognised and the process that the Bank expects to follow.

The Bank has published guidance that sets out the manner in which a non-UK CSD may make a recognition application. Jurisdictional equivalence and an MoU with the relevant third country regulator are required as part of the recognition process. If a CSD’s jurisdiction has not been granted equivalence, their regulator or finance ministry can engage directly with HMT using the following contact: equivalence@hmtreasury.gov.uk.

Any enquiries should be directed to FMIInformation@bankofengland.co.uk, along with a contact name and details for further discussion.

Fees regime for recognised non-UK CSDs

The Bank published a Statement of Policy on 25 November 2022 on its annual fee regime for non-UK CSDs, and revising the existing recognition fee.

Applying to receive UK settlement finality protection

On 18 February 2019, the UK parliament approved a statutory instrument that makes amendments to the UK Settlement Finality Regulations (SFRs). These set out how overseas CCPs, CSDs and payment systems can receive settlement finality designation within the UK. The UK parliament has also approved a second statutory instrument making further minor amendments to the UK SFRs. The effect of these is to dis-apply, for systems not governed by UK law, two of the designation requirements, relating to information sharing to third parties and notification requirements by participants in the event of their insolvency. 

There are different application processes for different FMI types. All non-UK law private systems can apply using this application form and guidance – Central Banks should contact the Bank directly instead by emailing SFD-Enquiries@bankofengland.co.uk.

There are no statutory timelines for processing settlement finality designation applications, but the Bank will endeavour to process these applications as soon as practicable. 

The Bank has published its approach to the monitoring of third country systems designated under the SFR. The Bank does not at this time intend to charge fees for the monitoring of compliance with the SFRs. 

On 31 July 2019, the Bank announced that it does not intend, at this time, to charge fees to non-UK law FMIs for UK settlement finality designation. 

Any queries from systems or their users regarding this process should be sent to SFD-Enquiries@bankofengland.co.uk.

Back to top

This page was last updated 02 May 2024