In a recent piece, published in multiple jurisdictions, the new Commissioner of the US CFTC, Christopher Giancarlo, has advocated "deference" (i.e mutual respect for the regulations of other jurisidctions) as his preferred method for cross border harmonization of CCP rules.
Since 2009, we have witnessed the exponential growth of clearing at CCPs in large part due to the implementation of G-20 reforms to centrally clear all standardized swaps contracts. Today there is wide-spread agreement of the importance of CCPs in our cross-border markets. Yet, there are diverging regulatory views on how to effectively supervise these global CCPs. More recently, as part of the common approach between the European Commission and the CFTC in the regulation and supervision of cross-border CCPs, the CFTC allowed certain EU-based CCPs seeking to operate in the United States to comply with corresponding EU regulatory requirements. These deference arrangements not only support the cross-border activities of different actors in the financial markets, but also help avoid fragmentation in the markets, protectionism, and regulatory arbitrage.