SEC Issues Statement on European Central Counterparties Seeking to Register or Request Exemptions From the SEC

The Securities and Exchange Commission today issued a Policy Statement and Guidance focused on central counterparties (CCPs) authorized under the European Markets Infrastructure Regulation (EMIR) that may seek to access and operate in the U.S. securities markets. The Statement provides transparency into the Commission’s processes and highlights efficient ways that CCPs based in the European Union (EU) can register as a clearing agency or request exemptions from certain requirements under the Securities Exchange Act of 1934.

The SEC has a longstanding and collaborative relationship with its European counterparts with respect to supervision and enforcement of regulated entities. The SEC understands that the European Commission is working towards the adoption of an equivalence decision shortly with respect to the SEC’s regime for regulating CCPs.

“Over the past several years, the SEC and its staff have engaged extensively with our European counterparts and have gained a substantial understanding of their approach to the regulation of central clearing under EMIR,” said Chairman Jay Clayton. “I want to thank my many European and domestic colleagues who devoted substantial time and attention to these issues and, in particular, the importance of harmonized regulation in the international security-based swap market. Today’s action will help pave the way for EU market participants to continue to clear securities transactions using SEC-regulated CCPs.”

First, the Statement provides guidance regarding the process for registration as a clearing agency, explaining that EU CCPs can use preexisting materials, including any self-assessments, in their applications to demonstrate compliance with EMIR and consistency with Commission requirements for CCPs. Such materials and self-assessments could facilitate both the EU CCP’s efficient preparation of the application and the Commission’s review of an application for registration.  Second, the Statement provides guidance regarding the process for and considerations undertaken by the Commission regarding requests for exemptions. In particular, the Statement identifies specific factors that the Commission will consider where such factor is relevant to a particular future request for an exemption by an EU CCP.