On the virtual eve of the scheduled expiration of the Cross Border Exemptive Order of the Commodity Futures Trading Commission, the CFTC and the European Commission announced this morning an accord in principle on the regulation of cross-border derivatives. In general, the accord potentially permits a great deal of substituted compliance even with transaction-based rules with guaranteed affiliates of US swap dealers, and provides a model for accords among other members of the G-20.
The highlights of this accord are as follows:
In addition, the CFTC and EC commit to work together to coordinate approaches to straight-through processing and to harmonize rules on margins for uncleared swaps. The CFTC and EC will also work together to resolve remaining issues related to trade repositories, such as consistent data fields, access to data and other issues related to privacy, blocking and secrecy laws.
As a result of this accord, the CFTC Open Meeting scheduled for July 12 is likely to include passage of Final Guidance encompassing this CFTC EC Accord, as well as a host of exemptive relief.
For more information, see:
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