Brussels, 10/02/2016 (Agence Europe) - On Wednesday 10 February, the European Commission and the US Commodity Futures Trading Commission (CFTC) reached an agreement on a common approach to the recognition of European and American prudential rules on the activities of central clearing counterparties (CCP) for financial derivatives.
“It has taken a long time, but it is good news that after more than three years of discussion, we are now able to provide certainty for the marketplace. It means that European CCPs will be able to do business in the United States more easily and that US CCPs can continue to provide services to EU companies”, said the Commissioner for Financial Services, Jonathan Hill, in a press release.
As long as the national experts at the Council of the EU approve the approach agreed upon, the Commission will very soon (by 21 February?) adopt an equivalency decision for the American prudential rules, where these are comparable with the European rules. This decision will allow the European Securities and Markets Authority (ESMA) officially to allow American central clearing counterparties to offer their services to European investors.
In parallel, the American CFTC will recognise the equivalence of the European prudential rules to allow European CCPs a facilitated process of accreditation in the United States, and to offer their services in the United States whilst continuing to abide by certain European prudential rules.
The transatlantic regulatory approach will not cover the American market for agricultural commodity derivatives traded and cleared in the United States, as this market has a low degree of interconnectedness with the financial system as a whole.
Both sides will work together in order to identify, following this transatlantic agreement, the potential emergence of regulatory arbitration on the part of financial players between the United States and the EU, or at international level.
In October 2014, the Commission recognised the equivalence with regard to the 'EMIR' regulation (648/2012) of the prudential rules governing the activities of CCPs in Australia, Hong Kong, Japan and Singapore (see EUROPE 11188). (Original version in French by Mathieu Bion)