The (FCA) has issued a statement this Monday, confirming that United Kindom and United States authorities are putting measures in place so when (EU), in whatever form that may take, there will not be regulatory uncertainty regarding the derivatives market between the two markets.
The statement today was released on behalf of the FCA, (BoE) and the (CFTC). Specifically, the three authorities have stated that US trading venues, central counterparties (CCPs) and firms will be able to continue to provide services in the UK.
At present, because the European Commission has declared CFTC regulatory framework equivalent to that of the EU, US trading venues and firms can provide services within the region. Now, UK authorities have come to the same conclusion and British firms will be able to access these firms on the same basis.
Source: FCA
“Cooperation with our international partners has always been an important part of our work, and it will remain so after Brexit. This partnership will support our day-to-day supervisory activities and rule-making, as well as encouraging open markets and the development of rigorous global standards, by ensuring that wherever firms operate, they are regulated on a consistent basis.”
BoE, FCA and CFTC Update MoUs to Ensure Smooth Transition Post-Brexit
The BoE, FCA and CFTC have also put in place information-sharing and cooperation arrangements. This is to support effective cross-border oversight of the derivatives markets and participants.
As part of this effort, the BoE and CFTC are in the process of updating their (MoU), which was originally signed in 2009 and covers clearing activity. This MoU will now recognise CFTC-registered CCPs.
Furthermore, the FCA and CFTC are also updating their MoUs which cover select firms in the derivatives and the alternative investment fund industry. These agreements were signed back in 2013 and 2016.
Source: Bank of England
“As host of the world’s largest and most sophisticated derivative markets, the US and UK have special responsibilities to keep their markets resilient, efficient and open. The measures we are announcing today will do that. Market participants can be confident that the clearing and trading of derivatives between the UK and US will maintain the high standards of today when the UK leaves the EU.”
For more information, you can read the full statement .
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