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“The Path Forward document has failed at the first hurdle”, said Anthony Belchambers, chief executive at the Futures and Options Association in London. “It’s all very well making speeches about cooperation, but words and agreements need to be followed by actions. If regulators on both sides are really serious about transatlantic progress, the issues for SEFs need to be sorted out and it’s just not been happening.”
Belchambers was referring to a deal signed in July between the European Commission and US regulator the CFTC, under which both sides effectively agreed to recognise the other’s rules as equivalent in certain circumstances. The deal was hailed at the time as a significant breakthrough and a sign that global coordination towards the G20 agreement on derivatives reforms was working.
However, on 2 October new US rules requiring virtually all firms that trade derivatives to register with a swap execution facility took effect, with no exemption or delay for non-US firms. Just days before the deadline, EU commissioner Michel Barnier sent a letter to the CFTC’s Gary Gensler asking for more time until an EU-US deal could be worked out. No reply came in time and the European Commission is now concerned that European firms could be liable under the US rules.