On 3 September, ESMA published its technical advice to the European Commission on the equivalence of the US and Japanese derivatives frameworks to the EU rules. On 2 October, ESMA supplemented its technical advice with complete equivalence findings on Australia, Switzerland, Hong Kong, Singapore, Canada, South Korea and India. The advice is not the final EU statement on the equivalence of these regimes because the European Commission is charged with adopting legislative acts on equivalence. Once it has considered ESMA’s advice, the Commission has a discretion (not apparently limited to concerns about financial services) to declare equivalence. Broadly speaking, these countries’ rules on derivatives have been considered equivalent but this is subject to market participants agreeing to apply European standards, where higher.

Equivalence -

Under the European Market Infrastructure Regulation (“EMIR”) the European Commission may adopt implementing acts declaring that the legal, supervisory and enforcement arrangements of a non-EU country are equivalent to the requirements in EMIR. For a central counterparty (“CCP”) or trade repository (“TR”) established in a non-EU country to provide their services in the EU, an equivalence decision is one of the requirements that must be fulfilled before the European Securities and Markets Authority (“ESMA”) will grant access of the CCP or TR to EU investors. Equivalence decisions on other obligations under EMIR have the effect that if one party to a derivative trade is established in a non-EU country and the contract is subject to EMIR, the counterparties may choose to follow the non-EU country’s equivalent regime instead of EMIR.

Please see full memo below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Shearman & Sterling LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.