U.S. and EU Hold Financial Markets Regulatory Dialogue (with Lofchie Comment)

The U.S. – EU Financial Markets Regulatory Dialogue ("FMRD") met to exchange information on regulatory developments, identify potential regulatory conflicts and discuss shared interest in developing robust standards. The participants agreed to address and implement in a timely manner the G20 commitments on OTC derivatives, including the agreement to trade on standardized derivatives on organized platforms.

Representatives included the European Commission ("EC"), European Supervisory Authorities ("ESAs"), European Banking Authority, European Insurance and Occupational Pensions Authority, European Securities and Markets Authority, U.S. Treasury Officials, Board of Governors of the Federal Reserve System ("FRB"), CFTC, FDIC and SEC.

The participants agreed that the CFTC, ESAs and EC will intensify discussion and seek as much consensus as possible on the scope for equivalence and comparability findings. In addition, the staff of the EC, SEC and ESAs agreed on the importance of having continued technical discussions about EU equivalence assessments of market infrastructures subject to SEC regulation, as well as the developing SEC OTC derivatives regime.

All parties agreed to develop shared understandings regarding regulating cross-border banks and to continue to cooperate on the "consistent implementation of prudential banking standards for internationally active banks."

Lofchie Comment: U.S. regulators seem to be striking a far more cooperative tone with non-U.S. regulators lately. Perhaps the CFTC should gracefully withdraw the Interpretative Guidance for being inconsistent with the new global outreach, rather than run the risk of having the Guidance voided by a court?

Related news: Regulators Issue Report to the G20 on Cross-Border Derivatives Regulation (with Lofchie Comment) (August 30, 2013).