CFTC officials say EU refuses to explain plan’s 'systemic risk' application to US clearinghouses

18 October 2018 11:00pm
US Commodity Futures Trading Commission officials say they have tried unsuccessfully to get the EU to explain how it expects to apply the “systemic risk” definition to US clearinghouses in its proposed regulation of third-country derivative clearinghouses after Brexit.

The officials said in an interview with MLex that they have asked EU counterparts for specific criteria they would use in classifying a US clearinghouse such as CME Group or Intercontinental Exchange as systemic — without getting a clear answer.

If deemed systemic, US clearinghouses with European operations would be subject to EU and American oversight under legislation that has been discussed in the European Parliament and is now before the Council of the EU.

The disclosures, along with some made Wednesday by CFTC Chairman Christopher Giancarlo, offer new detail on escalating US concerns that US clearinghouses would have to face costly dual regulation under the proposal.