WIREDGOV

The European Commission recently (04 April 2022) adopted a decision declaring that a number of United States exchanges supervised by the US Securities Exchange Commission (SEC) are equivalent to EU regulated markets. As a result, derivatives traded on these US exchanges will now be treated as exchange-traded derivatives under EU law.

In addition, the Commission has also amended its equivalence decision regarding US central counterparties (‘CCPs'). It now covers certain products (e.g. mortgage-backed securities issued or guaranteed by certain government sponsored agencies traded on a ‘To-Be-Announced basis' (‘TBAs'). 

These decisions complement the equivalence decision adopted by the Commission for US CCPs registered with the US Securities and Exchange Commission adopted in 2021.

Commissioner Mairead McGuinness, responsible for Financial Stability, Financial Services and the Capital Markets Union, recently said:

“Today's decisions are essential, facilitating EU market participants' access to SEC-supervised US CCPs. These decisions are in the interest of the EU - we want our capital markets to be better integrated with other international markets.  We look forward to continued good cooperation between the EU institutions and agencies and the US Securities and Exchange Commission.”

A number of US CCPs supervised by the US SEC have applied to the European Securities and Markets Authority (ESMA) for recognition based on the equivalence decision adopted in 2021. The recent decisions will allow ESMA to continue its work on the recognition process. Upon successful completion of the recognition process, these US CCPs will be able to provide central clearing services in the EU, to EU clearing members and trading venues.