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.