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EC and U.S. Hammer Out Deal on Cross-Border Swaps Trades 

February 21, 2014
Joe Mont, Compliance Week

Citing significant progress on harmonizing cross-border swaps regulations between the European Union and United States, regulators on both sides of the Atlantic have struck their latest agreement.

An effort to resolve regulatory differences, an initiative, dubbed “Path Forward,” has occupied both parties for several months and at times has been quite contentious. However, last week, European Commissioner Michel Barnier and Mark Wetjen, acting chairman of the U.S. Commodity Futures Trading Commission, announced an agreed upon regulatory framework for both CFTC regulated swap execution facilities (SEFs) and EU-regulated multilateral trading facilities (MTFs).

The problem that lurks behind the agreement is that, because of the global nature of derivatives transactions, the simultaneous application of each other's requirements could lead to overlapping demands, legal conflicts, inconsistencies, and legal uncertainty. Because of the Dodd-Frank Act, numerous swap trading rules are already in place.

Read more: Compliance Week

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