ABSTRACT
This chapter explores the approach of the UK regime of Central Counterparties (CCP) in the over-the-counter derivatives market (OTCDM), and the first of its shortcomings. It identifies the two drawbacks of risk-based regimes affecting the UK regime of CCPs in the OTCDM. The chapter explains the rationale behind the adoption of the CCPs in the OTCDM. It addresses the questions regarding the motivations to implementing CCPs in the OTCDM and to identify the Bank's regulatory priorities in the first years of regime implementation. The chapter also explores the most relevant provisions regarding UK regulation and the relevant provisions of European Market Infrastructure Regulation (EMIR). It also explores provisions in EMIR related to CCPs, prudential regulation, conduct of business, and organisational requirements. The chapter presents some considerations about the role that the Financial Conduct Authority should have, the importance of the design and implementation of a conduct of business regime for CCPs, and the elements that such a regime should include.
