Tuesday, July 30, 2013

EU and US Announce Landmark Pact on Cross-Border Derivatives

Author: David Schwartz J.D. CPA
As the market subject to these regulations is international, it is acknowledged that, notwithstanding the high degree of similarity that already exists between the respective requirements, without coordination, subjecting the global market to the simultaneous application of each other’s requirements could lead to conflicts of law, inconsistencies, and legal uncertainty.
On July 11, 2013 European Commissioner Michel Barnier and United States Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler announced a Path Forward regarding their joint understandings on a package of measures for how to approach cross-border derivatives. This new pact responds to the G20 commitment to lower risk and promote transparency in the over-the-counter (OTC) derivatives markets, but in a way that recognizes the challenges of regulating what is now understood to be a virtually borderless market. Pledging cooperation, the EU and US hope to ensure that regulations put in place "pursue the same objectives and generate the same outcomes." Much coordination between US and EU regulators has already in many places resulted "in final rules are essentially identical, even though the regulatory calendars are not always synchronized."

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Wednesday, January 16, 2013

EC Crosses the Rubicon into Regulation of OTC Derivatives and Investment Advisers

Author: David Schwartz J.D. CPA
On December 19, 2012, the European Commission adopted technical standards on the European Markets Infrastructure Regulation (EMIR) as well as a Delegated Regulation supplementing the Directive on Alternative Investment Fund Managers (AIFMD) (called "Level 2 measures").  These two measures have been under formulation and consideration since 2010, and the technical standards adopted on December 19 meet important preconditions to implementing EMIR and AIFMD throughout all EU member countries.
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Friday, July 13, 2012

EU to Provide Hedging Exemption for OTC Derivatives

Author: David Schwartz J.D. CPA
In his July 4 address before the Europlace Financial Forum, European Securities and Markets Authority  (ESMA) chair, Steven Maijoor, announced that ESMA would be proposing standards implementing regulation of OTC derivatives, central counterparties and trade repositories (EMIR) by September 30.  Maijoor said that these implementation standards will include an end-user exemption similar to the one expected to be in place under the Dodd-Frank Act.
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Monday, April 30, 2012

Comparing US and EU Derivatives Regulation Regimes

Author: David Schwartz J.D. CPA

As a result of commitments made at the G20 in 2009, member states across the globe are engaging in a number of regulatory reform initiatives addressing derivatives. Though the G20 members agreed to some basic principles of regulation, and officials say that some level of cooperation and coordination is happening, the proposed regimes are not identical, and each may have extraterritorial effects.  These new sets of rules and regulations emanating from each jurisdiction's initiative may present some difficult compliance issues for end users of derivatives with global trading operations.  Sidley & Austin has put together a report comparing and contrasting some of the provisions and new regulations under the US's Dodd-Frank Act and those under the EU's EMIR and MiFID II.

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Saturday, March 3, 2012

ESMA Issues Consultation Draft on Regulation of OTC Derivatives, CCPs and Trade Repositories

Author: David Schwartz J.D. CPA
The European Securities and Markets Authority has issued a discussion draft on proposed regulation of  OTC Derivatives, CCPs and trade repositories.  The draft introduces provisions to improve transparency and reduce the risks associated with the OTC derivatives market and establishes common rules for central counterparties and for trade repositories.
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