U.S. and E.U. participants in the Joint Financial Regulatory Forum exchanged views on financial regulatory developments at a recent meeting in Washington, D.C. U.S. participants included staff of the Treasury Department, Federal Reserve Board, Federal Deposit Insurance Corporation, Securities and Exchange Commission, Commodity Futures Trading Commission, and Public Company Accounting Oversight Board (PCAOB). E.U. participants included representatives of the European Commission, European Banking Authority, European Securities and Market Authority (EMSA), and Single Resolution Board.
This was the first meeting of the Forum since Treasury and the European Commission decided on enhancements to the dialogue and changed the name of the organization, formerly known as Financial Markets Regulatory.
Issues discussed by the Forum included:
- Banking. Participants talked about bank capital and liquidity issues, including legislative and rulemaking plans for the net stable funding ratio and the leverage ratio, and next steps in finalizing the international regulatory reform agenda in banking.
- CCP resolution. Attendees discussed central counterparty resolution to identity cross-border considerations.
- OTC derivatives. E.U. and CFTC participants examined the equivalence of U.S. swaps trading platforms under the E.U.’s Markets in Financial Instruments framework. In response to U.S. concerns regarding the E.U.’s delay in issuing rules requiring margin for uncleared derivatives beyond the international deadline of Sept. 1, 2016, the E.U. participants indicated that technical standards will be issued as soon as possible.
- Fund issues. ESMA reported that it is advising the European Commission regarding the extension of the EU Alternative Investment Fund Managers Directive passport to U.S. fund managers. Participants noted recent useful exchanges to help clarify the effect of the Volcker Rule on foreign private funds.
- Insurance. Treasury and the European Commission welcomed the continuation of negotiations for a covered agreement on prudential insurance and re-insurance matters between the United States and the E.U.
- Audit. The PCAOB and European Commission participants acknowledged progress on transatlantic cooperation in audit oversight. Participants also noted continuing efforts to more clearly define approaches to cooperation.
- Date protection. Participants supported continuing data transfers between Europe and the United States for regulatory, supervisory, and enforcement purposes. They agreed that authorities’ need for timely and complete access to information is critical for regulatory oversight and effective investigation and prosecution of misconduct. Both sides acknowledged the importance of continuing these discussions.
- G-20 financial regulatory reforms. Finally, participants highlighted their support for G-20 efforts to build a stronger and more resilient financial system, and their continued desire to work with other G-20 members to finalize the remaining core elements of the financial regulatory reform agenda.
The next Forum meeting will take place in Brussels in February 2017.
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