Published: 14th November 2017

Of relevance to: Any European firm trading in derivatives on authorised US markets
Key date: Applicable from 30 September 2017

The European Commission and the US Commodity Futures Trading Commission (“CFTC”) have agreed on a common approach regarding certain derivatives trading platforms, allowing European counterparts to continue trading in derivatives on authorised US markets.

The European Commission has adopted an equivalence decision regarding the US framework for non-cleared OTC derivatives. Together with a similar decision by the CFTC for the EU framework, this will avoid a double regulatory burden for these transactions both in the EU and in the US.

It ensures that cross-border actors will not have to post double margins for derivatives transactions.

Together, these two measures will provide certainty to markets, minimise regulatory arbitrage, and encourage competition on a level playing field.

While the equivalence determinations regarding the EU uncleared margin requirements (under the European Market Infrastructure Regulation on derivatives, central counterparties and trade repositories (“EMIR”)) and CFTC uncleared margin requirements are effective immediately, implementation of the common approach is expected to take more time.

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