CFTC And ESMA Sign MOU On U.S. DCOs Recognized Under EMIR

The CFTC and the European Securities and Markets Authority ("ESMA") entered into an "enhanced" Memorandum of Understanding ("MOU"), which sets forth the terms for agency cooperation related to ESMA's assessment of compliance by U.S., CFTC-registered central counterparties ("CCPs") that have applied to ESMA as third-country CCPs, pursuant to Article 25 of EMIR. The MOU expands upon terms set forth in a 2016 MOU.

The 2021 MOU sets the scope of cooperation between the CFTC and ESMA concerning the CCPs, and deals with issues that include general regulatory or supervisory developments, proposals that "materially" change regulatory requirements, operational issues, coordination of on-site visits, provision of information to ESMA and areas of mutual interest (e.g., adverse market events and stress tests).