On Friday 16 December, the European Commission adopted decisions determining that India, Brazil, New Zealand, Japan (for raw materials), the United Arab Emirates (UAE) and the Dubai International Financial Centre (DIFC) have equivalent regulatory regimes for central counterparties (CCPs) to the European Union.
The Commission has also determined that the rules governing certain financial markets in Australia, Canada, Japan and Singapore can be deemed equivalent to those in the EU.
CCPs are intermediaries between the two parties to a derivative contract, buying from the seller and selling to the purchaser. Their main role is managing the risk of bankruptcy of one of the transaction’s counterparties.
The first set of decisions confirms that non-EU CCPs in India, Brazil, New Zealand, Japan (Commodities), UAE and Dubai DIFC meet the EU's regulatory standards. This mutual recognition will contribute to market certainty and cross-border activity, avoiding the fragmentation of markets.
In March 2016, the Commission adopted an equivalence decision for US prudential rules for CCPs for financial products derivatives after three years of talks between the European Commission and the United States Commodity Futures Trading Commission (CFTC) (see EUROPE 11512). (Original version in French by Élodie Lamer)