21 November 2014

Reuters: US under pressure to match EU rules on market benchmarks

The US may need tougher rules to regulate market benchmarks or risk being locked out of the European Union market, CFTC said.

"I share your concerns that, if adopted in its current form, the EC benchmark proposal would have adverse market consequences," Tim Massad, chairman of the US Commodity Futures Trading Commission told two U.S. lawmakers in a letter. Massad said banks and asset managers in the EU would not be allowed to use benchmarks compiled in countries whose benchmark regime was not deemed by Brussels to be "equivalent" to the bloc's standards. This would prohibit EU institutions from hedging using thousands of products traded on US futures exchanges and swap trading platforms, Massad said.

"Because of the potential consequences on financial markets, the CFTC also stands ready to work with its counterparts in the US financial regulatory sector to address this issue further," Massad told the two lawmakers.

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