Trump risk to CCPs; suggests revisiting equivalence rules – French regulator warns on Brexit – 6th July 2017

The Autorité des Marchés Financiers’ (AMF) latest risk outlook highlights the risks Brexit and the Trump administration may bring Europe’s ability to regulate clearing houses. Europe’s equivalence regime for central counterparties (CCPs) ought to be revisited to account for the new geopolitical landscape, the AMF said. The report flags risks posed by hackers and cyber criminals to market organization and functioning as high. It discusses a new trend of cyber-related market manipulation. Separately, the regulator calls for more rigorous stress testing. Political risk high for CCPs The AMF said Brexit and the Trump administration’s approach to financial regulation made it harder to manage risks associated with clearing houses, because both raised the possibility of regulatory arbitrage.

 

Rachel Wolcott, Regulatory Intelligence