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EU equivalency for Dubai's CCP rules

Chris Hamblin, Editor, London, 27 January 2017

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The European Union believes that the Dubai Financial Services Authority's rules for central counterparties are equivalent to its own.

The governmental club's announcement acknowledges the work undertaken by the Dubai Financial Services Authority, which polices the Dubai International Financial Centre, to instil what it calls "internationally-recognised best practices" with an eye on systemic risk. This is expected to encourage cross-border activity between European clearing members and central counterparties located in the Dubai International Financial Centre (DIFC) by reducing the regulatory burden that belabours participation in the market.

This, in turn, springs from the Principles for Financial Market Infrastructures issued by the International Organisation of Securities Commissions. Nasdaq Dubai is the DFSA-licensed central counterparty operating in the DIFC in respect of equites and derivatives trading. Alongside the DIFC, the EU published 'equivalence' decisions for the regulatory regimes of central counterparties in India, Brazil, New Zealand, Japan and the UAE. The EU also thinks of the central counterparty regimes of the US, Canada, Switzerland, Australia, Hong Kong and Singapore as 'equivalent.'

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