EU Urges U.S. to Delay Imposing Derivatives Rules on Its Banks

The European Union is urging the U.S. to delay enforcing over-the-counter derivatives rules on EU banks amid concerns that the measures are unclear and may create unnecessary costs.

Requirements for EU-based banks and other companies to register with U.S. regulators “are creating confusion” for firms operating in the U.S., Chantal Hughes, a spokeswoman for Michel Barnier, the EU’s financial services commissioner, said in an e-mail.

Barnier has sent letters to U.S. regulators this month “encouraging them to delay” the process “until there is legal clarity about the substantive conditions that such registration will entail,” Hughes said. The commissioner is seeking “further in-depth discussion and collaboration” on the rules, she said.

The U.S. Commodity Futures Trading Commission and Securities and Exchange Commission adopted criteria last week defining which firms will face requirements that are being drawn up for companies involved in OTC derivatives trading.

The Dodd-Frank Act of 2010 called for most OTC trading to be guaranteed by central clearinghouses and traded on exchanges or other platforms. It also sets out rules governing clearing, trading and capital that are being fleshed out by regulators.

Global regulators in the Financial Stability Board have called for nations to regulate OTC derivatives by end-2012, including by pushing trades through clearinghouses. EU legislators approved measures to do this last month.

To contact the reporters on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net;

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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