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Barnier and Gensler agree OTC cooperation pact

Wednesday 29 September 2010 - by Will Henley

US Commodity Futures Trading Commission chairman Gary Gensler and European commissioner Michel Barnier have signalled their determination to agree “fundamental” reforms to the OTC derivatives market, in a statement released this week.

Calling for increased cooperation to ensure global access to "all data" on trade repository derivatives transactions, the European and US regulatory chiefs vowed to join forces to provide “comprehensive oversight” of the swaps markets and avert any potential for regulatory arbitrage.

Following their meeting in Brussels on 28 September, Barnier (pictured), responsible for EU internal markets and services, said: “It’s essential – across the board on all financial regulation – that the United States and Europe move in parallel and that we don’t create new space for regulatory arbitrage.

"That’s why I look forward to continuing to work closely together with chairman Gensler, and his colleagues, to ensure robust implementation of the G20 commitments.”

In their joint statement, the two men said they discussed the US Dodd-Frank Wall Street Reform and Consumer Protection Act and the EU’s proposal for a regulation on OTC derivatives.


Specific proposals include regulating derivatives dealers for capital and margin, requiring standardised OTC derivatives to be cleared by central counterparties, and the imposition of stringent prudential and organisation rules and risk mitigation standards.

Gensler added that he and Commissioner Barnier enjoyed a “strong partnership”, saying: “Based on the European Commission’s proposal for regulatory reform of the swaps marketplace as well as the Dodd-Frank Act passed in the US, I am confident that we will bring strong and consistent regulation to both the European and US swaps markets.”


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