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Decision on derivatives exchange rules will not be reached until "summer"

EU and US regulators failed to reach agreement on harmonised rules for derivatives exchanges this week, but are hopeful of finalising an approach by summer. 08 May 2015

Jonathan Hill, European Commissioner for Financial Stability, Financial Services and Capital Markets Union, and Timothy Massad, Chairman of the US Commodity Futures Trading Commission said in a statement that discussions had been "constructive and progressing".

The cost to EU banking groups of trading through US clearing houses may rise on 15 June because of EU rules on banks' capital requirements. Under rules introduced after the banking crisis EU banks must ensure they have capital to cover part of their exposure to derivatives trades transacted through clearing houses. That requirement is higher for trades routed through US clearing houses than through those in the EU or in countries whose rules, as regards clearing houses,  are treated by the EU as 'equivalent' to EU rules.

Without agreement by 15 June, the costs for European clearing firms to use US clearing houses will rise.

"We are committed to ensuring financial stability by ensuring an appropriate treatment of risks, as well as ensuring market participants can operate cross border in a global marketplace," the regulators said.

Discussions have been "mutually satisfactory on the issue of the ability for both sides to potentially defer to each other's rules", they said.