The deadline, previously December 15, will be postponed until June 15, 2015. A European Commission spokeswoman said that an extension of the December 15 deadline had been proposed, and that the EU was hopeful it would be adopted shortly. The delay is coming after months of negotiations failed to produce a breakthrough in how to reconcile swaps rules across international jurisdictions.
The CFTC requires foreign-based clearing houses to meet US rules when they do business here. In return, Europe after the deadline will stick to its own rules for US clearing houses rather than exempting them as it has done for countries such as Japan, Hong Kong and Australia.
The impasse had added uncertainty for US clearing houses. Without a deal in which the United States and the EU formally recognised each other's rules, European banks would have needed to hold far higher capital buffers for deals cleared through US firms. Those banks could take their business to clearing houses in countries recognised by Europe. The delay that is due to be announced will be the second such move, and if the conflict still isn't solved after June 15, even longer delays were possible.
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