ESMA Says EU Third-Country Rules Must Be Overhauled

The transcript discusses the concept of equivalence in financial regulation, particularly in the context of Brexit and its impact on the EU and UK financial markets. It explores the challenges of maintaining market stability and oversight when clearing occurs outside the EU, such as in London or the US. The discussion also touches on potential regulatory changes in the US and their implications for European markets, emphasizing the need for robust supervision and the challenges of relying on home country regulators.

What is the primary focus of the equivalence regulation discussed in the context of Brexit?

• To harmonize tax policies across the EU

• To regulate immigration policies

• To promote free trade agreements

• To ensure financial stability by aligning third country systems with EU standards

How does the European Central Bank view the relocation of euro derivatives clearing post-Brexit?

• As a resolved issue with no further action needed

• As an inevitability over time

• As a minor issue with little impact

• As a decision solely for the UK to make

What is a key concern for securities market regulators regarding third country CCPs?

• The cost of registration

• The lack of sufficient information on risks

• The competition with local CCPs

• The language barriers in communication

Why is equivalence important for third country CCPs operating in the EU?

• It ensures they can operate without oversight

• It enables them to rely on their home country regulator

• It allows them to bypass EU regulations

• It provides tax benefits

What is the main challenge in applying equivalence globally?

• Lack of interest from major economies

• The need for multiple registrations and supervision

• The high cost of implementation

• The complexity of legal frameworks

What potential impact could US regulatory changes have on European markets?

• They could result in a trade war

• They will have no impact

• They might necessitate structural changes in Europe

• They could lead to increased tariffs

What is the EU's stance on maintaining equivalence decisions?

• They are based on political agreements

• They are irrelevant to financial stability

• They depend on the robustness of existing supervision and regulation

• They are permanent and unchangeable