CFTC and EU Strike a Deal to End Regulation Redundancy

Today, the European Commission and the CFTC announced a deal that will end the regulation overlap of the swaps market between the two regulatory bodies.

The EU’s financial services chief Michel Barnier and CFTC chairman Gary Gensler announced that the agreement will require banks to comply with only one set of standards for at least some aspects of swaps trading. The deal is aimed at protecting banks from additional costs caused by redundant requirements, while squashing the treat to EU-based clearinghouses from being cut off from the US market.

“As swap market/derivatives participants come into compliance with new regulatory regimes around the globe, a close working relationship between the US and EU with regard to cross-border swaps regulation is mutually beneficial,” the CFTC said in a release. “By coordinating our efforts, we are providing a model for other regulators and jurisdictions working to implement their G-20 commitments.”

According to a story filed by Reuters, the regulatory agencies agreed to “a ‘path forward’ on a package of measures that laid out how to apply the rules across borders,” allowing companies to apply rules of the jurisdiction where they are based.

To read the CFTC’s full release, click here.