CFTC Commissioners urged European Union regulators to continue cross-border regulatory deference, notwithstanding the United Kingdom's exit from the EU ("Brexit").
At the Futures Industry Association annual meeting in Boca Raton, Florida, CFTC Commissioners Rostin Behnam and Brian Quintenz each made a case against proposed changes to the EU's regulation of central counterparty clearinghouses ("CCPs") following Brexit. Mr. Behnam warned that the EU's approach could lead to certain U.S. CCPs being subject to additional and unnecessary regulatory burdens and would undermine the terms of the 2016 CCP equivalency determination between the CFTC and the European Commission.
Mr. Quintenz said that the European Commission's proposed amendments to EMIR are a "clear breach and violation" of the 2016 agreement. Mr. Quintenz argued that it would be "foolish" for the EU to treat Brexit as a reason for "reneging on its agreement with the CFTC." Mr. Quintenz further said that he will (i) vote against any additional EU equivalence determinations and (ii) not support efforts to assist requests by European national market regulators for no-action relief from CFTC rules and orders unless European authorities give "specific assurance" that they will honor their commitments. "I see no reason for the CFTC to further pursue any cross-border harmonization with the EU," he added.
Commentary / Nihal Patel
The comments from Mr. Quintenz and Mr. Behnam make clear that the CFTC has a united front when it comes to revisiting the CCP equivalence negotiation with the European Union. (Chairman Giancarlo previously made his case in an op-ed in The Wall Street Journal.)
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