The US Commodity Futures Trading Commission (CFTC) Chairman Timothy Massad has signed a Memorandum of Understanding (MOU) with the European Securities and Markets Authority (ESMA) regarding cooperation with respect to derivatives clearing organisations (DCOs) established in the United States that have applied or that may apply to ESMA for recognition as central counterparties (Recognised CCPs).
Through the MOU, the CFTC and ESMA express their willingness to cooperate with respect to Recognized CCPs.
The CFTC and the European Commission (EC) anticipated the execution of an MOU when the Common Approach for Transatlantic CCPs was announced earlier this year (see CFTC-EU Common Approach). As part of that common approach, the EC adopted an equivalence decision following which ESMA has undertaken a process for recognising DCOs established in the United States. The execution of this MOU satisfies a condition of the ESMA recognition process and serves to facilitate recognition of US CCPs.