EU regulator clears way to keep Irish shares trading post-Brexit

Planning well advanced for settlement of securities

The European Securities and Markets Authority’s  move on Friday to temporarily recognise Euroclear UK & Ireland in London as a so-called third country CSD for the first six months of the year gives time for the transfer to the new system.

The European Securities and Markets Authority’s move on Friday to temporarily recognise Euroclear UK & Ireland in London as a so-called third country CSD for the first six months of the year gives time for the transfer to the new system.

 

The EU regulator for financial markets paved the way for electronic trading in shares and debt instruments listed on Euronext Dublin to continue post-Brexit, after confirming on Friday that it will temporarily recognise a UK-based system used for the settlement of Irish trades for the past two decades.

Planning is well advanced for settlement of Irish securities to transfer from a UK-based central securities depository (CSD) called Crest, operated by Euroclear UK & Ireland in London, to Euroclear Bank in Belgium before the end of next March.

However, the European Securities and Markets Authority’s (ESMA) move on Friday to temporarily recognise Euroclear UK & Ireland in London as a so-called third country CSD for the first six months of the year gives time for the transfer to the new system.

Confirmation

The confirmation marks a follow-on step from the European Commission deciding late last month to grant the UK-based CSD the right to continue to temporarily operate in the EU as Brexit transition arrangements expire at the end of December.

“ESMA’s recognition decision will apply from 1 January until 30 June 2021,” the authority said. “This time period should give concerned EU issuers sufficient time to transfer their securities to EU CSDs.”

A law signed by President Michael D Higgins on Christmas Day 2019 set out a way for the settlement of Irish shares and bonds held in electronic form to move from Crest in the UK to Euroclear’s Euroclear Bank in Belgium before the end of next March.

Companies with shares or debt listed in Dublin must tell Euronext Dublin, the stock exchange operator, by February 24th that they have passed necessary corporate resolutions to allow for the migration of their securities to the new holding and settlement system in Belgium on March 12th.