EC adopted an equivalence decision determining that the SEC regime for U.S. central counterparties is equivalent to the EU rules. The equivalence decision determines that the legal and supervisory arrangements applicable to U.S. central counterparties registered with SEC can be considered to be equivalent to requirements laid down in the European Market Infrastructure Regulation (EMIR). The decision will allow such U.S. central counterparties to apply for recognition by ESMA. Once ESMA recognizes them, these U.S. central counterparties will be able to provide central clearing services in EU. The decision shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
The responsibility for supervision of central counterparties in the U.S. is shared between SEC and CFTC. This decision complements the existing equivalence decision for U.S. central counterparties regarding CFTC, which was adopted in 2016. The equivalence decision applies only to SEC-regulated covered clearing agencies and is conditional. To be allowed to offer services in EU, the U.S. central counterparties will have to have rules in place with respect to certain risk management requirements. ESMA already recognized a number of U.S. central counterparties registered with, and supervised by, CFTC. EC plans to review the rationale for equivalence every three years. For EC to adopt an equivalence decision, a third-country regime has to fulfil three conditions laid down in EMIR:
- Central counterparties authorized in the third country must comply with legally binding requirements that are equivalent to requirements laid down in EMIR
- Central counterparties in the third country must be subject to effective supervision on an ongoing basis.
- The legal framework of the third country must provide for an effective equivalent system for the recognition of foreign central counterparties.
Effective Date: OJ+20 Days
Keywords: Europe, Americas, EU, US, Banking, Central Counterparty, CCPs, Derivatives, Central Clearing, Equivalence Regime, CFTC, SEC, EC
Previous ArticleECB Sets Out Results of Supervisory Review and Priorities for 2021
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)