On 15 September 2010, the European Commission (“EU Commission”) tabled its legislative proposal (the “Proposal”) for a Regulation on OTC derivatives, central counterparties and trade repositories (the “Regulation”).1

The draft regulation, aimed at improving the transparency and safety of the over-the-counter (“OTC”) derivatives market, is very much in line with the Commission’s previous consultation papers.2

It is also intended to be aligned with the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) on key issues (e.g., partial exemption for non-financial counterparties), with the aim of ensuring a level playing field between the European Union (“EU”) and U.S. and to reduce opportunities for regulatory arbitrage.

As with the Dodd-Frank Act, however, there still remain many details to be filled in by future regulation.

We summarise below the key provisions contained in the draft Regulation.