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EC Adopts Equivalence Decision With Respect to SEC Regulatory Framework for Central Counterparties

Jan. 27, 2021

On January 27, 2021, the European Commission (EC) adopted an equivalence decision stating that the SEC’s regulatory framework applicable to central counterparties (CCPs) that are “covered clearing agencies” under SEC rules is equivalent to relevant European legal and regulatory requirements.  The EC’s decision is an important first step on the road to providing greater regulatory certainty for CCPs and their members on both sides of the Atlantic. 

In making its determination, the EC considered the legal and supervisory arrangements applicable to CCPs under securities laws administered by the SEC, regulations promulgated by the SEC, and internal CCP rules approved by the SEC under its self-regulatory organization (SRO) rule filing process. The EC concluded that the outcome of the SEC’s legal and supervisory arrangements and the SRO rules is equivalent to the requirements under applicable European Union law, to the extent these U.S. requirements meet certain risk mitigation standards specified in the EC’s implementing decision. The EC also found that the SEC’s legal and supervisory arrangements provide for effective supervision and enforcement of such CCPs on an ongoing basis and determined that the SEC has an effective equivalent system for the recognition of CCPs authorized under third-country legal regimes.

I would like to thank my EC colleagues for their cooperation and look forward to working with the European Securities and Markets Authority to facilitate its recognition of U.S. CCPs regulated by the SEC as clearing agencies.

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