Global regulators have implemented central clearing mandates for numerous products and updated the rules for the CCPs that now manage more risk. Mission accomplished? Not quite. Unfortunately, territorial skirmishes are setting up a duplicative, confusing web of requirements for clearinghouses that will create compliance conflicts and vulnerabilities rather than a harmonised, more resilient financial system. It is time to recommit to ensuring that our alliance remains strong. Regulatory conflicts that may ultimately result in global market fragmentation are at odds with our shared mission. We at the US Commodity Futures Trading Commission should lead the way by re-evaluating our approach to overseas CCPs. We were the first country to implement new clearing rules for OTC derivatives and were determined to require any foreign-regulated clearinghouse wishing to offer these products to US clients to register with the CFTC.
Let us refocus on the original mission, keeping in mind three key points. First, clearinghouses were determined to be a potential solution, not a contributing factor, to the financial crisis. Second, both the EU and the US have implemented the fundamental G20 standards and, third, both sides have mutually recognised that their requirements are equivalent or comparable. We should build upon, rather than ignore, our progress. If we remain committed to applying comparable regulations globally, there is no need to duplicate supervisory requirements.
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