The CFTC published a notice in the Federal Register that it approved (i) a substituted compliance framework for dually registered central counterparties (“CCPs”) located in the European Union and (ii) a comparability determination with respect to certain EU rules. The CFTC’s determination allows European clearinghouses that are registered with the CFTC as derivatives clearing organizations, and that are also overseen by European regulators, to comply with EU requirements that satisfy equivalent CFTC requirements for financial resources, risk management, settlement procedures, and default rules and procedures.
The determination is effective immediately.
Lofchie Comment: At last, the CFTC is making meaningful progress in closing the regulatory rift between the United States and the European Union. Such progress is due to the persistence and determination of CFTC Chair Massad who managed to overcome his predecessor’s vision of a Europe surrendering to the dominance of U.S. regulation – a vision that failed completely and proved to be a waste of time and energy.