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CCP Battle Drags On 

June 16, 2015

Thomas Krantz and Tim Reucroft, COO Connect

The prolonged transatlantic battle over the mutual recognition of central counterparty clearing houses (CCPs) reflects deep differences over the costs of resolving a failing CCP. And asset managers may find that their share of those costs is on the rise.

On May 7 Jonathan Hill, European Commissioner for Financial Stability, Financial Services and Capital Markets Union, and Timothy Massad, Chairman of the US Commodity Futures Trading Commission (CFTC), released a brief statement announcing that discussions over the recognition by European regulators of US-based CCPs had so far failed to reached a conclusion.

European regulators have now twice pushed back a deadline to impose significantly higher capital charges on banks clearing derivatives trades via “non-recognised” CCPs. So far, Europe’s securities market regulator (ESMA) has only granted recognised status to 10 non-EU CCPs, all in the Asia-Pacific region.

At issue is the uneven global implementation of rules intended to ensure the safety of CCPs and other financial market infrastructures.

Read more: COOConnect

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