April 14, 2021

Volume XI, Number 104

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April 13, 2021

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April 12, 2021

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European Commission Adopts Equivalence Decision With Respect to SEC Regulatory Framework for Central Counterparties

On January 27, Allison Herren Lee, the acting chair of the Securities and Exchange Commission, announced the European Commission’s (EC) adoption of an equivalence decision, stating that the SEC’s regulatory framework applicable to central counterparties (CCPs) that are “covered clearing agencies” under SEC rules is equivalent to relevant European legal and regulatory requirements.

In making its determination, the EC considered regulations promulgated by the SEC, the legal and supervisory arrangements applicable to CCPs under SEC-administered securities laws and internal CCP rules approved by the SEC pursuant to its self-regulatory organization (SRO) rule filing process. The EC determined that the outcome of the SEC’s legal and supervisory arrangements, as well as the SRO rules, is equivalent to the applicable requirements under EU law, to the extent these US requirements meet certain risk mitigation standards specified in the EC’s implementing decision. The EC also found that the SEC’s legal and supervisory arrangements provide for effective ongoing supervision and enforcement of such CCPs and determined that the SEC has an effective equivalent system for recognizing CCPs authorized under third-country legal regimes. As a result of the equivalence decision, US CCPs can apply for recognition by the European Securities and Markets Authority (ESMA) and, once recognized by ESMA, will be able to provide central clearing services in the EU.

Acting Chair Lee’s statement.

The EC’s equivalence decision.

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©2021 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 29
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About this Author

Susan Light, Katten Law Firm, Finance Law Attorney, New York
Partner

Susan Light focuses her practice on financial services regulatory matters. She counsels broker-dealers, hedge funds, investment banks and financial services clients on enforcement issues involving the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), other self-regulatory organizations (SROs) and state and federal regulatory authorities. She has particular experience related to sales practice issues, financial and operational issues, anti-money laundering, crowdfunding, cybersecurity, and cryptocurrencies.

...
212-940-8599
Stanley V. Polit, Katten Muchin, Financial Services lawyer, Corporate Regulatory Matters Attorney
Associate

Stanley Polit concentrates his practice in transactional, corporate and regulatory aspects of financial services matters. Stan is able to provide legal services to a wide variety of clients including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, commodity trading advisers, financial institutions and general corporate clients.

Prior to joining Katten, Stan served as a council member for a national crisis management firm, where he specialized in crisis communication and merged media strategies. He has...

312.902.5420
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