The European Commission has determined that the United States’ regime for non-centrally cleared over-the-counter (OTC) derivatives transactions is “equivalent” to the EU regime under the European Market Infrastructure Regulation (EMIR), in terms of the legal, supervisory and enforcement arrangements. In particular, the decision concludes that Commodity Futures Trading Commission (CFTC) rules on risk monitoring and mitigation for OTC derivative contracts not cleared by a central counterparty are equivalent to EMIR. It also determines that US rules on obligations on the exchange of collateral between counterparties are equivalent to EU rules.
The decision will alleviate the regulatory burden for EU and US companies as it will allow market participants to comply with only one set of rules and avoid duplicative or conflicting rules.
The decision takes the form of an implementing act, and will enter into force on the twentieth day following its publication in the Official Journal of the EU.