European swap-trading platforms won a reprieve from Dodd-Frank Act rules in a cross-border regulatory deal announced days before U.S. trading requirements are set to take effect.
The U.S. Commodity Futures Trading Commission and European Union officials, in an agreement announced today, granted the European trading facilities relief from having to register in the U.S. Many interest rate swaps will be required to trade on swap execution facilities, or Sefs, in the U.S. under CFTC rules starting Feb. 15.
“Today is an important step but far from the final one on the road towards global convergence,” Michel Barnier, the EU’s financial services chief, said in a joint statement with the CFTC. “This agreement shows how, as G-20 commitments move from words to action, regulators can and should work together to ensure that their respective rules interact with each other in the most effective and efficient fashion.”
The international reach of CFTC rules has been among the most contentious issues between the Washington-based regulator and financial firms that operate around the world. Wall Street lobbying groups that represent banks including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) sued in December, seeking to limit the agency’s ability to impose rules outside the U.S.
Today’s deal concerns EU trading platforms known as multilateral trading facilities and the swaps traders who use them.
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