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Trading Commissioner Calls For Harmonized Cross-Border Rules

Commissioner of the U.S. Commodity Futures Trading Commission, Scott O’Malia, stated in a speech earlier this week that U.S. and European regulators must unite immediately to harmonize international derivatives trading rules before market fragmentation and low liquidity become lasting fixtures of the swaps and futures markets.

As reported by Platts, O’Malia spoke at a meeting including financial lawyers groups at the Federal Reserve Bank of New York, and said that the European Commission and the CFTC must declare that the U.S. regulatory regime is equivalent under the European Market Infrastructure Regulation.

According to O’Malia, it is essential that international regulators continue to work together to sync swap data reporting, exchange trading and [central counterparties] clearing before market fragmentation and contraction of liquidity hardens and becomes permanent.

Furthermore, the commissioner explained that he hoped the CFTC and EC could agree on accepting U.S. rules as comparable before the December 15 deadline.

"As I have stated before, it is my firm belief that the key to effective and efficient cross-border regulation of the swaps market is through an outcomes-based approach where regulators would defer to the other jurisdiction when it is justified by the quality of their respective regulation and enforcement regimes," O'Malia said.

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