Featured Product

    BoE and CFTC Strengthen Supervisory Cooperation in Derivatives Markets

    October 20, 2020

    CFTC and BoE signed an updated Memorandum of Understanding (MoU) regarding cooperation and the exchange of information in the supervision and oversight of clearing organizations that operate on a cross-border basis in the US and the UK. Through this MoU, CFTC and BoE expressed their willingness to cooperate in the interest of fulfilling their respective regulatory mandates, particularly in preserving the benefits of cross-border clearing activity. The CFTC Chair (Heath P. Tarbert) and the BoE Deputy Governor for Financial Stability (Jon Cunliffe) published a joint op-ed article in Risk.net. In this article, they outline the details of the agreement and discuss the framework for regulating the global derivatives markets.

    The op-ed article highlights that the long-lasting significance of regulatory reforms was seen when the COVID-19 pandemic sent shockwaves through the world’s financial markets earlier this year. The agreement entrenches these key principles: the central counterparty’s home country is the primary supervisor; the supervision of central counterparties that operate in both the US and UK is based on close co-operation and mutual respect; and the home authority will take the lead in any response in emergency situations. Both US and UK agree that cross-border infrastructure needs to be held to appropriately high standards. To support safe and efficient global markets, the regulation and supervision of such infrastructure needs to maintain the highest levels of resilience, commensurate with the risks. Also, any conflicting or overlapping regimes need to be avoided, which is why this regulator relationship needs to be founded on the right degree of deference to home supervisors.

    The MoU strengthens the relationship between the regulators responsible for resilience of the largest and most important derivatives markets and central counterparties in the world. The supervision of central counterparties that operate in both US and UK is based on close cooperation and mutual respect for each regulator’s regime and supervisory practices. The MoU recognized the history of cooperation between CFTC and BoE and encouraged supervisory coordination and reliance upon the other authority’s supervision and regulatory framework. The MoU supersedes a 2009 agreement and follows a 2019 joint statement by the CFTC, BoE, and other UK authorities on continuity of derivatives trading and clearing post-Brexit. 

     

    Related Link: BoE News Release

     

    Keywords: Europe, Americas, UK, US, Banking, MoU, CCPs, Derivatives, Cross Border Cooperation, CFTC, BoE

    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7307