CFTC and Bank of England Enhance Cooperation on CCP Oversight

The CFTC and Bank of England ("BoE") enhanced their cooperation on oversight of derivatives clearinghouses.

In a joint statement, the CFTC and BoE reaffirmed their commitment to "close cooperation and mutual understanding" consistent with their 2020 Memorandum of Understanding ("MoU") (see previous coverage). According to the MoU, the CFTC and BoE will (i) engage in periodic consultation on supervisory issues, (ii) share information such as clearing services data and (iii) offer assistance on specific matters as needed.

The BoE said that, based on its Statement of Policy, the CFTC meets the criteria of its "Level 1 Informed Reliance Assessment" (a/k/a "Tier 1"). The BoE Policy, which is used to tier incoming CCPs regarding the systemic risk they pose to the UK financial system, was implemented following the UK’s withdrawal of the European Union to monitor non-UK CCPs. As a Tier 1 incoming CCP, the BoE will defer to the CFTC's supervision and oversight of U.S.-based incoming CCPs.