How Does the Regulation of CCPs Differ between the US (CFTC) and Europe (EMIR)?
In the US, the CFTC regulates Derivatives Clearing Organizations (DCOs), which are the equivalent of CCPs, primarily through the Dodd-Frank Act. In Europe, the European Market Infrastructure Regulation (EMIR) sets the rules for CCPs.
Both aim to increase safety and stability through mandatory clearing, robust risk management, and capital requirements, but their specific legal and operational frameworks differ.
Glossar
Derivatives Clearing Organizations
Intermediary ⎊ Derivatives Clearing Organizations (DCOs) function as central counterparties (CCPs) in the derivatives market, legally interposing themselves between the buyer and seller of a contract.
European Market Infrastructure Regulation
Scope ⎊ European Market Infrastructure Regulation, or EMIR, extends to central counterparties (CCPs) and non-central counterparties (NCPs) involved in over-the-counter (OTC) derivatives, increasingly encompassing crypto derivatives as regulatory frameworks evolve.
Ccps
Clearing ⎊ Central Counterparties, or CCPs, function as critical financial market infrastructures that stand between counterparties in a derivatives transaction.
CFTC
Jurisdiction ⎊ The Commodity Futures Trading Commission (CFTC) is a United States regulatory agency responsible for overseeing commodity futures and options markets.