ESMA advises on equivalence of foreign jurisdictions
The European Securities and Market Authority (ESMA) has published its advice to the European Commission on the equivalence of the OTC derivatives regulatory regimes of the US, Japan, Australia, Singapore, Switzerland and Hong Kong. To quote from the press release:
"ESMA considers third-country regimes equivalent where the legal provisions and the level of supervision and enforcement is similar to that of EMIR. ESMA finds the regulatory regimes of Australia and Switzerland for CCPs equivalent to EU rules. Conditional equivalence is proposed to the following regimes:
- Hong Kong, Japan, Singapore, and the US for CCPs;
- the US and Japan for central clearing, requirements for non-financial counterparties and risk mitigation techniques for uncleared trades; and
- the US for TRs."
Also of note are the upcoming next steps:
"For Australia, Canada, Hong Kong, India, Singapore, South Korea and Switzerland, ESMA will be delivering its advice on areas not yet covered by 1 October 2013. CCPs from third-countries that want to continue to be offering clearing services directly to EU clearing members will have to apply for ESMA recognition by 15 September 2013."
Obviously, with regulations not yet finalised in a number of jurisdictions the finality of equivalence will take some time. But the fact that ESMA has declared the US regulatory regime equivalent to the European interpretation shows the straight-forward approach taken here and is also in the spirit of the "Path Forward" agreement from beginning of July this year.