European Commission adopts equivalence decision for central counterparties (‘CCPs’) in USA

The European Commission has today determined that the U.S. Commodity Futures Trading Commission (CFTC) has the equivalent requirements as the EU in regulating central counterparties (‘CCPs’). This follows the announcement of 10 February 2016 by Commissioner Hill and Chairman Timothy Massad on a common approach for transatlantic CCPs. This decision will ensure that both the EU and the US operate to the same high standards and at a comparable level of cost to their participants. It also alleviates the regulatory burden for the US and the EU, allowing compliance with only one set of rules. This will encourage market certainty and cross-border activity, avoiding fragmentation of markets and liquidity. Commissioner Jonathan Hill, responsible for financial stability, financial services and capital markets union said: “This is an important step forward for global regulatory convergence and implementing our agreement with the CFTC. It means that US CCPs, once recognised by ESMA, can continue to provide services to EU companies. We look forward to the CFTC’s forthcoming decision on substituted compliance which will allow European CCPs to do business in the United States more easily” For more information, see our press release