EU CCP Framework Worries CFTC


Speaking before the Association of German Banks in Berlin, US Commodity Futures Trading Commission Chairman Christopher Giancarlo asked EU not to throw away years of negotiations by adopting a new framework for supervising central clearing counterparties.

Christopher Giancarlo, CFTC

“My concern lies with parts of the EU proposal that would subject US CCPs to overlapping EU regulations and supervision without due deference that was already agreed to between the EU and US in the 2016 common approach for transatlantic CCPs,” he said. “We spent three years working on that agreement and remain committed to it. We do not want to renegotiate it.”

The current level of regulatory harmonization is working, according to the Duff and Phelps 2018 Global Regulatory Outlook Survey, Giancarlo noted.

A majority, 52%, of the financial executives polled in the survey believed regulators are improving their ability to collaborate with their cross-border peers. And close to a third of the respondents also replied that the effort has lead to greater harmonization and consistency in global regulations.

Giancarlo also cited Bundesbank Board member Andreas Dombret and others’ agreement that the transatlantic CCP arrangement should not change.

“The arrangement is working now,” he said. “I hope this issue does not divide the United States and Europe.”

Where regulatory harmonization needs to be consistent, reasonable, and cost-effective, Giancarlo viewed the introduction of additional regulation would lead to more confusion and increased costs.

“We have been supervising them for decades,” he said. “The CFTC’s requirements for CCPs, like the EU’s, are based on agreed upon international principles.”

Giancarlo would rather have regulators acknowledge that different regulators can reach the same results in different ways and adopt outcomes-based deference decisions.

“Different regulators use different legal frameworks and different legal tools, and we need to respect such differences when they achieve similar regulatory outcomes,” he added.

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