Today the Committee on Capital Markets Regulation (CCMR) and the Financial Markets Law Committee (FMLC) issued a joint statement on EU-US CCP recognition.
First, the existing differences between EU and US initial margin requirements do not amount to a systemic risk concern and therefore should not preclude mutual recognition. We describe the key relevant differences, their effects and how they offset one another.
Second, the CFTC should adopt a process for recognizing foreign clearinghouses as subject to equivalent regulation as U.S. CCPs. Currently, the EU has such a process in place, but the US does not.
Third, with regards to supervision of CCPs operating in multiple jurisdictions, the lead supervisor should be the country in which the clearinghouse is based. This would minimize duplicative and potentially conflicting supervisory efforts.