European regulatory changes continue to move forward, but there are significant differences between the US and EU, and also between the European states themselves. The Futures & Options Association’s Anthony Belchambers spoke with John Lothian News about where Europe stands in the rulemaking process and the challenges that still remain.
Belchambers said that the issue of extraterritoriality continues to concern EU regulators and market participants.
“Once one jurisdiction takes out a decision to apply its rules extra territorially, then the jurisdiction to whom those rules apply will say, ‘ah, we’ll do the same,’” Belchambers said. “Then you have this clashing rules approach. I think there is a sort of difference where you have the substitutive compliance approach with the SEC and CFTC, and they are not exactly closely aligned. In the EU… we have a common path forward that’s been drawn up between the CFTC and the commission. There are a lot things being said but not a lot of things being done.”
Belchambers said there are a number of issues that may slow the regulatory pace in the coming months, including the European elections in May.
“We have MIFID and MIFIR coming down the track,” Belchambers said. “But then we’ve got European elections. So even if we have agreement on level one, MIFID and MIFIR, some of those things we need to have a coherent approach on. That’s very difficult to do if you haven’t actually developed your rules and supporting standards.”
Even though the US rule making process is much further along than EU rules, Belchambers said that global firms are having some difficulty in trying to determine how to comply and strategize without them.
“If I’m doing my business a cross border basis, or I’m doing business into that CCP or that market, or with those customers, it’s very difficult to get that organized and structured in a sensible and coherent way,” Belchambers said.