The European Council announced that the EMIR changes proposed in June 2017 are now to go into trilogue. These are the Brexit-inspired ones (not the “EMIR Refit”) that allow ESMA to identify systemically important non-EU clearing houses (meaning all the London ones) and subject them to stricter extra-territorial requirements including (i) compliance with the EU’s prudential requirements for EU-based CCPs, (ii) providing ESMA with relevant information and (iii) allowing on-site inspection by ESMA in the third country. Most controversially, it would provide that if ESMA and EU27 central banks deem these insufficient, the CCP could be required to operate through an EU27 subsidiary. Readers will remember ISDA’s 8th June 2017 letter warning that relocating euro clearing to the eurozone would lead to an average 15%-20% higher IM being required because of a loss of netting efficiencies, which raises the fascinating possibility of EU27 banks being priced out of EUR swaps as a result (!) so some form of dual oversight makes sense. There is a precedent for this: SwapClear, the LCH clearing platform for IRS, is co-supervised by the US’s CFTC and the Bank of England. In October 2017 Bloomberg reported Phillip Hammond saying that the UK Government accepted it would have to share supervision of the UK’s CCPs with the EU post-Brexit (although he didn’t actually say this, he just said that he wanted to “construct a governance, supervision framework” that satisfied the EU) and the CCPs would probably go along with that.