Release Number 8181-20

Statement of CFTC Chairman Heath P. Tarbert on the European Commission’s Draft Delegated Acts

June 11, 2020

Washington, D.C. — Commodity Futures Trading Commission Chairman Heath P. Tarbert issued the following statement in response to the three draft Delegated Acts published by the European Commission (EC) addressing the supervisory oversight of third-country central counterparties (TC-CCPs) by the European Securities and Markets Authority (ESMA), including by specifying the criteria to be applied by ESMA when determining a TC-CCP’s systemic importance to the financial stability of the European Union or one or more Member States:

“The CFTC welcomes the EC’s proposals published today, which are a positive step in the EU’s implementation of its amended regime for CCP regulation. Mindful of the objectives and responsibilities of the EU authorities tasked with monitoring risks to EU financial stability, today’s proposals balance the fulfillment of those objectives and responsibilities with deference and international comity as to home country supervision of U.S.-based derivatives clearing organizations operating in Europe. 

“I continue to appreciate the collaborative spirit of engagement with our EU counterparts and remain encouraged by the commitment on both sides of the Atlantic to proceed with a mutually beneficial arrangement that will stand the test of time. Such an arrangement for the supervisory oversight of U.S. TC-CCPs entails not only regulatory deference and international comity but also enhanced information sharing and regular communications between supervisory authorities.

“Over the years since the G20 reforms to derivatives markets following the 2008 financial crisis, and to the present day, we are increasingly witnessing cross-border derivatives regulation that utilizes comity and deference. We appreciate the way that these important principles are reflected in today’s proposals, which set forth clear and reasonable quantitative indicators to determine whether a TC-CCP may be systemically important to the EU or any Member State.

“Moreover, I have repeatedly said before that deference is a two-way street. We continue to consider ways in which the CFTC can show further deference to the EU, and other jurisdictions as appropriate, with regard to market participants across key pillars of the cleared derivatives markets, ranging from intermediation and execution, to clearing, and trade reporting. 

“Clear, predictable, and sound regulations and supervision are foundational for building vibrant and resilient transatlantic derivatives markets. We look forward to continued collaborative engagement with our European counterparts.”