The CFTC and the European Securities and Markets Authority ("ESMA") signed a Memorandum of Understanding ("MOU") establishing a cooperative arrangement to facilitate ESMA's recognition of U.S. derivatives clearing organizations ("DCOs") as central counterparties ("CCPs"). The MOU follows in the wake of (i) the CFTC and the European Commission's announcement in February of a Common Approach to Transatlantic CCPs, and (ii) the adoption of the European Commission's Implementation Decision on March 15, 2016.
The MOU provides arrangements for cooperation, including providing ESMA with adequate tools for assessing compliance and for monitoring U.S. CCPs as a precondition for recognizing that they provide services to clearing members or trading venues established in the European Union.
In a paper comparing derivatives trading frameworks in the United States and the European Union, ISDA encouraged regulators to focus on "broad commonalities" and to facilitate the mutual recognition of the trading regimes.
