On May 7, 2015, Jonathan Hill, the European Commissioner for Financial Stability, Financial Services and Capital Markets Union, and Timothy Massad, the Chairman of the CFTC, issued a joint statement confirming that they had not yet reached an agreement on mutual recognition of US and EU derivatives clearinghouse rules, but that they hope to finalize an approach by summer 2015. The regulators released the statement following discussions on a possible "equivalence" decision by the European Commission for central clearing counterparties (CCPs), or clearinghouses, that are regulated and supervised by the CFTC but which operate in the EU.

US and EU regulators have been discussing harmonization of their clearinghouse regulations since 2013 because clearinghouses, their clearing members and end users of cleared derivatives have encountered increased costs associated with complying with two sets of regulations, under the Dodd-Frank Act in the US and EMIR in the EU.

Cleared derivatives margin rules have been the focal point of the impasse, and the CFTC and the European Commission conducted risk assessments regarding their respective margin requirements.The US uses a one-day gross margin approach, whereas Europe requires two-day net margin.

For details on US margin collateral rules for derivative sunder the Dodd-Frank Act and related rulemaking, see Practice Note, The Dodd-Frank Act: Derivatives Margin Collateral Rules.

For information on clearing under Title VII, see Practice Note, The Dodd-Frank Act: Swap Clearing and Exchange Trading under Title VII, and for details EU clearing rules under EMIR, see EMIR: requirement to clear OTC derivative contracts through a CCP.

For further information on the cross-border application of US swaps rules, see Practice Note, The Dodd-Frank Act: Cross-border Application of Swaps Rules.