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CFTC and EU Agree Transatlantic CCP Deal

11 February 2016

LONDON, 11 February 2016 - Yesterday, Timothy Massad, chairman of the Commodity Futures Trading Commission (CFTC), announced that the CFTC and the EU have agreed a deal to apply common standards to the assessment of central counterparties (CCPs).

This will enable EU regulators to issue equivalence determinations regarding the regulatory regime applying to U.S. CCPs and vice versa. This will make it easier for CCPs to offer their services to clearing members in each jurisdiction and also enables the EU to clarify when new capital rules for clearing firms regarding the treatment of exposures to CCPs will take effect.

Michael Thomas, Financial Institutions partner at Hogan Lovells said:

"This has been a long time coming. The EU reached equivalence determinations for most of the other key jurisdictions some time ago. There were a number of regulatory concerns for regulators on both sides of the Atlantic to navigate, in addition to what must have been a concern not to unfairly disadvantage EU CCPs and their users compared to the US CCPs and vice versa. The announcement represents a key breakthrough for the regulators and the clearing industry. The detail has yet to be seen, but this should be a positive step".

The team

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