At long last the US and EU have completed a deal on CCP equivalence, enabling business as usual and increasing regulatory harmony.
The European Union and the United States agreed on Wednesday to accept each other's derivatives rules in a long-awaited step to avoid splitting the $550 trillion market. The bulk of derivatives are traded in New York and London but for the past three years the EU and United States had been unable to accept each other's rules. Without convergence, clearing houses and international banks, which handle most transactions, faced costly overlapping requirements. The EU's financial services chief, Jonathan Hill, and Timothy Massad, who heads the Commodity Futures Trading Commission (CFTC) in the United States, said they have agreed a common approach for clearing houses. "It means that European CCPs will be able to do business in the United States more easily and that U.S. CCPs can continue to provide services to EU companies," Hill said in a statement.