UK regime for central counterparties (CCPs): EMIR requirements, BoE rule-making and supervision, third country recognition, risk management, interoperability, client segregation, FRANDT, MiFIR/CRR, and FSMA 2023 reforms
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What are CCPs and what do they do?
A central counterparty (CCP) is a kind of financial institution, often called a clearing house, that enables the clearing of both over‑the‑counter (OTC) derivatives and exchange‑traded derivatives (ETDs) in financial markets. CCPs fall within the category of financial market infrastructures (FMIs) within financial markets.
A derivative is a financial instrument whose worth is set by reference to, and thus derived from, an underlying asset, index, rate, reference point or risk, commonly termed the underlying asset or simply the underlying. Derivatives are bilateral contracts that shift some or all of the economic risk and return tied to the underlying from one counterparty to another, without any immediate delivery of the underlying item.
For OTC derivatives, terms are negotiated directly between the parties themselves, or at times arranged via a broker acting as intermediary. These differ from derivatives—typically futures or options—traded on public exchanges, known as exchange‑traded derivatives (ETDs). For ETDs, contract terms are set by the exchange on which they trade, rather than by the counterparties involved in practice. ETDs are generally straightforward and highly standardised, and can be readily traded by members of the general public. OTC derivatives, by contrast, range from...
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Web page updated on 22/05/2026
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