Letter on US and EU CCP margins

In a letter to Mr Michel Barnier, Commissioner for Internal Market and Services, European Commission, FESE highlights the differences in margin standards for exchange-traded derivatives between the EU and the US, which we believe could lead to regulatory arbitrage. We support the ongoing efforts to harmonize these standards, as seen in the “Common Path Forward on Derivatives” by the European Commission and the CFTC.
We are concerned that the increased margin requirements under EMIR (scheduled for Q1 2014) could drive market participants to lower-cost jurisdictions like the US.

To promote and support global competitiveness of European exchanges, we urge the European Commission to defer the introduction of increased margins until international harmonization is achieved. This will prevent the erosion of exchange-traded derivatives business in the EU.