Regulators agreed that more work can be done on CCP standards
Regulators called for increased convergence of standards,as opposed to a divergence,in a webinar hosted by the Depository Trust & Clearing Corporation (DTCC) last week.The European Securities and Markets Authority (Esma) noted that more work needs to be done when it comes to international standards for central clearing counterparties (CCPs) and central securities depositories (CSDs).The Bank for International Settlements (BIS) added that what is important is ensuring the resiliency of financial market infrastructures (FMIs),as well as creating consistency across jurisdictions in terms of the robustness of that resiliency.In support for the convergence of international standards,Commodity Futures Trading Commission (CFTC) added that while some regulators have to implement more granular regulations,they should keep a focus on the desired common result.
CFTC realized that it“must do better”on foreign CCPs
During a fireside chat at the Futures Industry Association’s Asia-V event,the Commodity Futures Trading Commission (CFTC) said that when it comes to allowing foreign central counterparties (CCPs) to offer over-the-counter (OTC) clearing to US clients,it has attempted to establish an exemption process for foreign CCPs to offer clearing to US clients,which approved new exemptions from US swap clearing requirements for foreign CCPs last month.However,CFTC admitted that there has been a tremendous amount of confusion regarding its recent attempts,and realized that as other jurisdictions apply their own measures to achieve the common goals of the G20 from 2009,the CFTC should have long ago revisited its policies into allowing US persons access to foreign markets.
Trade bodies including the Futures Industry Association and International Swaps and Derivatives Association have warned that the European Commission risks negatively impacting market participants in the European Union as it has yet to take critical equivalence decisions.The trades market participants in the EU and elsewhere trade a broad range of exchange-traded derivatives (ETDs) on UK markets, and there is no direct substitute for some of these instruments in the EU or other third countries.If equivalence is not granted, ETDs traded on UK regulated markets will be considered as over the counter (OTC) derivatives after the end of the Brexit transition period. They strongly recommend to the Commission to issue equivalence determinations at the earliest possible opportunity and, in any case, before the end of the transition period.
