Members of the European Parliament are currently discussing a report on cross-border regulation and supervision of financial services, under the rapporteurship of Brian Hayes MEP.
ISDA’s comment paper supports a risk-based approach to the evaluation and recognition of the comparability of regulatory regimes in third-country jurisdictions, in line with its September 2017 whitepaper on the issue.
ISDA’s paper also supports the work of the rapporteur, making a number of additional remarks, including:
- The current equivalence framework was not designed with the UK in mind and it is appropriate to apply a risk-sensitive approach to the relationship between the EU and such third countries in order to fulfil European Union (EU) objectives in the financial services area.
- The current concern to address the future relationship between the UK and other high-impact third countries should not result in a framework that makes all engagement in cross-border derivatives business more challenging.
- European Commission equivalence determinations should generally be focused on the outcomes resulting from non-EU jurisdictions’ regulatory frameworks.
- The current process for granting equivalence is insufficiently scalable.
- Existing equivalence mechanisms come with a number of challenges, including potential for withdrawal at short notice, inconsistency across different pieces of legislation, and the lack of a clear process for consultation with third countries.
- Equivalence is crucial to the ability of firms to operate effectively in non-EU markets.
Documents (1) for ISDA Response on ECON Cross-border Regulation Report
Latest
Stress Scenarios for CCP IM Simulators
ISDA has published a paper that explains why stress scenarios that central counterparties (CCPs) use for default fund sizing cannot be used for forward-looking initial margin (IM) simulators. Typically, stress scenarios used by CCPs consist of a single step, transitioning...
Paper on EMIR 3 Active Account Representativeness
On September 4, ISDA, the European Fund and Asset Management Association (EFAMA) and FIA shared a paper with EU policymakers requesting clarification on the implementation of the active account requirement under the third European Market Infrastructure Regulation in relation to...
ISDA In Review – August 2025
A compendium of links to new documents, research papers, press releases and comment letters published by ISDA in August 2025.
Episode 51: Trading Places
Markets have been volatile so far this year, but what has this meant for market liquidity? The Swap talks to Chris Edmonds from Intercontinental Exchange on trading activity and the market, economic and geopolitical outlook. Please view this page via...