CCP12 Responds To CFTC Consultations

CCP12 Responds to CFTC Consultations on Exemption from Derivatives Clearing Organization Registration (RIN 3038-AE65) and Registration with Alternative Compliance for Non-U.S. Derivatives Clearing Organizations (RIN 3038-AE87)

CCP12 - the Global Association of Central Counterparties responds to the consultations “Exemption from Derivatives Clearing Organization Registration” and “Registration with Alternative Compliance for Non-U.S. Derivatives Clearing Organizations” published by the Commodity Futures Trading Commission (CFTC).

CCP12 strongly supports the CFTC’s supplemental notice of proposed rulemaking (SNPR) as an effort to recognize the importance of regulatory deference to allow local policy-makers to adopt appropriate legal and regulatory requirements for the markets they oversee, while increasing cross-border cooperation and avoiding market fragmentation.

In our response, we highlight CFTC’s approach towards permitting a gradual, risk-based review of individual Derivatives Clearing Organizations (DCOs) which wish to clear swaps for U.S. customers of future commission merchants by permitting non-U.S. DCOs to comply with the DCO Core Principles through compliance with their home country regulatory regime. CCP12 would like to emphasize two key points:

• The SNPR expands the ability of U.S. swaps customers to access non-U.S. swaps markets.
• The SNPR provides appropriate protection to customers and the wider financial system without imposing duplicative requirements on exempts DCOs and their clearing members.

More generally, CCP12 supports the approaches that facilitate cross-border cooperation based on the CPMI-IOSCO’s PFMIs, which fosters trust among supervisors to uphold the Group of Twenty commitments to regulatory deference.