1 / 7

KEY DIFFERENCES BETWEEN DODD-FRANK AND EMIR Anthony Belchambers, CEO, FOA 27 th October 2011

KEY DIFFERENCES BETWEEN DODD-FRANK AND EMIR Anthony Belchambers, CEO, FOA 27 th October 2011. DRIVERS FOR TRANSATLANTIC CONVERGENCE. Shared post-crisis policy objectives and market targets

dante
Download Presentation

KEY DIFFERENCES BETWEEN DODD-FRANK AND EMIR Anthony Belchambers, CEO, FOA 27 th October 2011

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. KEY DIFFERENCES BETWEEN DODD-FRANK AND EMIR Anthony Belchambers, CEO, FOA 27th October 2011

  2. DRIVERS FOR TRANSATLANTIC CONVERGENCE • Shared post-crisis policy objectives and market targets • Industry priority to avoid needless regulatory duplication, conflict and cost of cross-border dealings • ESMA, SEC and CFTC convergence work • EU legislation is still under negotiation and susceptible to change • US enthusiasm to encourage the EU to “copy out” the US approach, which is less susceptible to change

  3. drivers AGAINST TRANSATLANTIC divergence • Some differences are inevitable, given different market structures, political pressures and regulatory priorities • Jurisdictions tend to “cherry pick” international standards • Differences in legal systems • Industry need to sustain market diversity, customer choice and business flexibility • Differentiated approach of Asian (and other) nations to regulatory repair

  4. key differences (1) Margin and capital requirements for bilaterally “cleared” swaps Multilateral execution of CCP-cleared swaps Regulatory scope for large-size end-users Derivatives capability of banks Exemption for non-financial end-users Scope of the intra-group exemption Position limits v position management Segregation of client money

  5. key differences (2) Ownership of market infrastructures Scope of CCP access rights Protection of the price formation process Foreign regulatory recognition Top-down / bottom-up approach to CCP clearing eligibility ----------------------------- Scope of Basel implementation Time differences in implementation

  6. REASONS FOR TIME DIFFERENCES IN IMPLEMENTATION • EU legislative, regulatory and political structures much more complex than the US • Differences in approach to consultation • Differences in political pressures • The programme for regulatory repair has snagged on too many “nice to haves”, populist priorities and cost and resourcing difficulties

  7. POSSIBLE CONSEQUENCES • A more restrictive and host-state driven approach to cross-border rights of market and customer access • Extraterritorial application of domestic rules, with potentially serious consequences for compliance complexity, legal risk and cost, based on e.g. • US commercial/economic effect • US customers • US presence • Non-US affiliates of US regulated institutions • Perceived evasion of CFTC rules • Definition of “swaps”, e.g. what is domestic/non-domestic NB. Comparative issues arising out of AIMFD, EMIR, MiFID, etc. • Enhancement of the benefits of regulatory arbitrage (driven also by other factors such as employment law, tax and business flexibility)

More Related