Platform operators seem to think that this new CFTC EC SEF agreement may not do much at all to keep liquidity between Europe and US markets.Read More
Under the European Parliament Economic and Monetary Affairs Committee’s revised European benchmark legislation, EU based institutions will be forbidden from holding any products linked to unauthorized benchmarks.
US banks and central counter parties (CCPs) seem to be gaining confidence in the European Commission (EC) overlooking differences in their clearing house rules, preventing US CCPs from losing European clients.
The CFTC and the EU have agreed to allow US firms to trade over European platforms, rather than forcing them to be traded through US swap execution facilities, or SEFs.
The agreement will relieve EU trading platforms from being affected by US derivative trading rules, at least for the time being.
The EU and the CFTC have announced that they will be working together in their implementation of cross-border regulation, after talks in Washington.
The European Union’s plan to quell big banks’ proprietary trading has been met with criticism from French banking lobbyists who say it will give an advantage to US banks, which would not be affected by the new rules.
The European Commission and the CFTC have many advantages of developing cross-border regulations together. In light of this demonstration of international cooperation, some have hopes that the G20 promise to promote transparency in over-the-counter derivatives trading will become more of a focal point in regulation.
Until the robustness of US credit swap policy has been reviewed, some European banks have been given more restricted access to clearing houses outside of the European Union. Because of concerns that US banking policies may not be compliant with European policies, credit swap rules have become a contentious issue between US and EU regulatory bodies, according to Bloomberg.
The E.U. has asked for a delay in the enforcement of new swaps rules set to take effect on July 12, when the exemptions for overseas banks of the Dodd-Frank Act expire. In a report…