Clifford Chance

Regulation of OTC derivatives markets - A comparison of EU and US initiatives

14 September 2012

Both the EU and the US have now adopted the primary legislation which aims to fulfil the G20 commitments that all standardised over-the-counter (OTC) derivatives should be cleared through central counterparties (CCPs) by end 2012 and that OTC derivatives contracts should be reported to trade repositories (and the related commitments to a common approach to margin rules for uncleared derivatives transactions). The US Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in July 2010 and the text of the EU Regulation on OTC Derivatives, CCPs and Trade Repositories (EMIR) was finally published in the Official Journal on 27 July 2012.

There is a significant commonality of approaches between EMIR and the Dodd-Frank Act in relation to the regulation of OTC derivatives markets, but there are also some significant differences. Clifford Chance, in conjunction with the International Swaps and Derivatives Association, has prepared a paper summarising the way in which the two regimes treat different categories of counterparty and highlighting certain other major differences between the proposed EU Regulation and the Dodd-Frank Act in relation to the trading and clearing of OTC derivatives. This paper updates an earlier paper produced in September 2010.

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