CFTC Chairman J. Christopher Giancarlo received a letter today from U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairman Pat Roberts and Ranking member Debbie Stabenow supporting CFTC commitment to equivalence agreement with the European Commission (EC), and pledge support for future CFTC decisions.
After years of negotiations, the CFTC and EC reached a bi-partisan equivalence agreement on cross-border clearinghouse oversight in 2016. Shortly after, the United Kingdom had a referendum to leave the European Union known as “Brexit,” leaving the EC to consider a major overhaul of the resulting clearinghouse framework from the CFTC-EC negotiations. Such overhaul would empower European regulation authorities over U.S. clearing houses.
“Disjointed regulatory activities will serve no market, and will only cause undue stress.” —Senator Pat Roberts, Chairman.
Chairman Roberts and Ranking Member Stabenow wrote to support Chairman Giancarlo’s statement that any unilateral change to the framework made by European authorities would be violation of trust between the U.S and Europe. The senators agreed with his statement and pledged support for future CFTC actions if the EC doesn’t honor the equivalence decision agreement,
“If the EC moves away from the 2016 CFTC-EC agreement, the CFTC should review the appropriateness of the exemptions and relief it has granted to foreign entities, including clearinghouses established in the European Union. The CFTC has existing authority to initiate such review, and we would support your efforts if you deem them appropriate and necessary.”
Later today, Chairman Giancarlo released a statement on the letter from the senate leadership members expressing his gratitude,
“I very much welcome this letter from Senators Roberts and Stabenow. I am very grateful to them for their strong support of the CFTC and the approach I have advocated in my discussions with EU authorities about the cross-border supervision of major clearinghouses. Their letter expresses the critical importance of keeping in place the 2016 equivalence agreement that was the product of over three years of intense discussions between the CFTC and the EU authorities. Regulatory and supervisory deference needs to remain the key principle governing how the CFTC and EU authorities work together on the supervision of US and EU CCPs.”
The U.S Committee press release can be found here.
Chairman Giancarlo’s statement release can be found here.