(Tentative) Cross Border Agreement on Derivatives Reached – Professor Chris Brummer – finance, trade and regulatory analysis blog

Regulators in the EU and US are mutually recognizing derivatives rules in anticipation of Mifid II:

The U.S. Commodity Futures Trading Commission (CFTC) and the European Commission (EC) said they had formally committed to treat each others’ rules as equivalent when Europe’s Markets in Financial Instruments Directive II or ‘MiFID II’ rules come into effect in January.

[…]

On Friday, the two regulators also said they had agreed to recognise each others’ rules for the treatment of collateral posted against swaps that are not processed by clearing houses. The deal means U.S. and EU firms can trade swaps in each others’ markets but comply with their home rules, reducing regulatory duplication and trading costs.

“The announcement on trading and margin equivalence by the EC and CFTC is a very positive and important step forward in efforts to ensure robust and liquid global markets that enable firms to efficiently manage their risks through derivatives,” said Scott O‘Malia, chief executive of global derivatives industry body ISDA.

But Friday’s agreement did not cover mutual acceptance of stock market rules, a step industry said is also crucial to avoid market disruption when MiFID II comes into force.

With Fintech Week, I can’t offer the same amount of commentary as I usually do, but this is, as one might assume, quite notable (though time will tell if agreement holds). Query what it means over the long term if the US reviews its rules on clearinghouses, and refines its policies. In any event, the story is here.