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US and EU agree deal on derivatives trading

05 December 2017, 22:43 CET
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US and EU agree deal on derivatives trading

Trading floor

(BRUSSELS) - The European Commission recognised Tuesday some US trading venues authorised by the Commodity Futures Trading Commission as eligible for compliance with the EU trading obligation for derivatives.

A derivative is a financial contract linked to the fluctuation in the price of the underlying asset or basket of assets to which it refers.

Today's decision will ensure that EU counterparties can continue to trade the most liquid derivatives instruments on US platforms.

"It is important that European firms can continue trading in derivatives on US markets," said Valdis Dombrovskis, EC vice-president in charge of Financial Stability, Financial Services and Capital Markets Union: "This is an excellent example how a safe, yet global, trading environment can be ensured in a spirit of open cooperation."

The Commodity Futures Trading Commission (CFTC) is also working towards exempting certain EU-authorised trading venues from registration requirements in the US.

This follows an agreement between the Commission and the CFTC on a common approach regarding certain derivatives trading platforms. It will enable EU platforms to offer trading services to US counterparties.

See also the joint EU-CFTC announcement on mutual recognition of derivatives trading venues.

Today's decision takes the form of an implementing act, and will enter into force on the day following its publication in the Official Journal of the EU.

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