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Derivatives: EU, US strike derivatives deal – by Patrick Temple-West

The European Union and the United States on Wednesday February 10 struck a long-awaited deal on how to regulate the global derivatives market, worth an estimated $550 trillion.

Once fully implemented, the deal will permit U.S. and European central clearing counter-parties to continue doing business in each other’s jurisdictions.

CCPs, or clearing houses, stand between the two sides of a derivatives trade, ensuring its completion even if one side goes bust.

Jonathan Hill, the EU’s financial services chief, said the deal, which was three years in the making, means that “European CCPs will be able to do business in the United States more easily, and that U.S. CCPs can continue to provide services to EU companies.”

Timothy Massad, chairman of the Commodity Futures Trading Commission — the European Commission’s opposite number in the talks — said in a statement that the deal “will ensure that our global derivatives markets remain robust, while keeping our financial system as stable and resilient as possible.

Additionally, it is a significant milestone in harmonizing regulation of our derivatives markets.”

Read more: EU, US strike derivatives deal – POLITICO

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