The European Commission has once again extended the transitional period relating to own funds requirements for exposures to central counterparties under the Capital Requirements Regulation by a further six months to June 15, 2018. In effect, the Dec. 7 decision postpones the effective date of rules that require European members of non-EU clearinghouses to set aside a higher amount of capital for exposures to clearinghouses that are not deemed to be "qualifying central counterparties."
With respect to U.S. markets, the practical effect is that the extension avoids a disruption to the clearing services that EU banks provide for equity derivatives in the U.S. Clearinghouses regulated by the Commodity Futures Trading Commission have been designated as QCCPs, but not clearinghouses regulated by the Securities and Exchange Commission because SEC rules in this area have not been determined to be equivalent.
According to OCC, the primary clearinghouse for the U.S. equity options markets, 18 of its clearing members are classified as EU-affiliated firms. They account for approximately 22% of OCC's open interest and 18% of its volume. Without the extension, OCC has estimated that its EU-based clearing members would have to maintain an additional $2.9 billion in capital.