EU and US sign deal over rules for derivatives

Michael Bow
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EUROPEAN Union policymakers yesterday inked an historic deal with US regulators on how to supervise the $633 trillion (£416 trillion) swap derivatives market, ending months of deadlock on regulating transatlantic swap trades.

The cross border agreement means banks, which are the main participants in the swap market, will be able to rely more on regulator rules in the jurisdictions where they trade, reducing the potential for overlapping laws and increased costs for banks.

It comes after months of horse-trading between the Commodity Futures Trade Commission (CFTC), the US derivatives watchdog, and the EU commission.

Both sides will now work together to draft new rules after agreeing that regulations policing swap trading on either side of the Atlantic are identical.

“The CFTC and the European Commission share the view that jurisdictions and regulators should be able to defer to each other when it is justified by the quality of their respective regulation and enforcement regimes,” both sides said in a joint statement yesterday after the agreement.