On 5 December, the European Commission and CFTC issued a joint announcement regarding the mutual recognition of derivatives trading venues.  

The announcement confirmed that the European Commission has adopted an equivalence decision regarding certain trading venues authorised by the US CFTC. The Annex to the decision provides a list of the contract markets and swap execution facilities considered to be equivalent to trading venues as defined under MiFID2. Accordingly, this enables firms to trade those derivative instruments that are subject to the trading obligation on the listed CFTC-authorised Designated Contract Markets (DCMs) and Swap Execution Facilities (SEFs) in the US. The decision will enter into force on the day following its publication in the Official Journal.

The announcement also acknowledges the CFTC’s recommendation in October to exempt European MTFs and OTFs from SEF registration, enabling US counterparties to comply with the CFTC’s trade execution requirement by executing swaps subject to that requirement on an exempted MTF or OTF.

If members have any questions, please contact Adam Jacobs-Dean, Oliver Robinson or Adele Rentsch.