The United States Commodity Futures Trading Commission and the European Commission: A 

Common Approach on Certain Derivatives Trading Venues

The European Commission ("EC") Vice President for Financial Stability, Financial Services and 

Capital Markets Union, Valdis Dombrovskis, and United States Commodity Futures Trading 

Commission ("CFTC") Chairman J. Christopher Giancarlo today announced a common approach 

regarding certain derivatives trading venues authorized in the European Union (“EU”) and in the 

United States of America. 

The Approach

The aim of the common approach is to ensure that EU counterparties are able to comply with the 

trading obligation under Article 28 of the Markets in Financial Instruments Regulation ("MiFIR") by 

executing mandated derivatives on EU authorized trading venues or CFTC-authorized swap execution 

facilities ("SEFs") and designated contract markets ("DCMs"), while ensuring that US counterparties 

can comply with the trade execution requirement under Section 2(h)(8) of the Commodity Exchange 

Act ("CEA") by executing swaps on certain EU authorized trading venues that are exempted from SEF 

registration pursuant to CEA Section 5h(g), as well as on SEFs and DCMs. 

The Vice President intends to propose that the EC adopts an equivalence decision to recognize CFTCauthorized SEFs and DCMs that operate in the United States as eligible venues for the execution of 

those derivatives transactions that will be subject to the EU trading obligation, provided the 

requirements of MiFIR, the Markets in Financial Instruments Directive ("MiFID II") and the Market 

Abuse Regulation ("MAR") are met. 

CFTC staff intends to propose, and the Chairman will support putting before his fellow 

Commissioners for a vote, the exemption by the CFTC of EU authorized swap trading venues (for this 

purpose, multilateral trading facilities (“MTFs”) and organized trading facilities (“OTFs”)), from the 

requirement to register with the CFTC as SEFs, provided that they satisfy the standard set forth in 

CEA Section 5h(g). This will render the exempt EU venues operating in the EU eligible venues for 

purposes of complying with the CFTC trade execution requirement. 

Key elements of the approach:

1. Equivalence

The Vice President intends to propose that the EC adopts an equivalence decision covering the CFTCauthorized SEFs and DCMs that are notified to it by the CFTC. The EC's authority to adopt an 

equivalence decision derives from Article 28(4) of MiFIR, which empowers the EC to adopt an 

equivalence decision should it deem that the legal and supervisory framework applicable to trading 

venues in a third country is considered to have equivalent effect to the rules in MiFID II/MiFIR and 

MAR. 

CFTC staff intends to propose, and the Chairman will support, the CFTC's exemption from the SEF 

registration requirement, through a single exemption order, of the trading venues authorized in

accordance with the MiFID II/MiFIR requirements that have been notified to the CFTC by the EC. 

The CFTC's exemption authority derives from CEA Section 5h(g), which empowers the CFTC to 

grant an exemption where it determines that a swap execution facility “is subject to comparable, 

comprehensive supervision and regulation on a consolidated basis by the appropriate governmental 

authorities in the home country of the facility.” 
The EC would be able to request an update to the venues covered by the CFTC's exemption. The 

CFTC would be able to request an update to the venues covered by the EC's equivalence decision. 

2. The applicable standards

The EC will assess equivalence under MiFIR Article 28 leading to the recognition of CFTCauthorized SEFs and DCMs on the basis of the CEA and the relevant CFTC regulations. The CFTC's 

assessment of EU trading venues under CEA Section 5h(g) will concentrate on the EU-wide standards 

established pursuant to the MiFID II/MiFIR and MAR. The EC will act as the "primary point of 

contact" during the CFTC's assessment of the EU regulatory framework and will make available to the 

CFTC, where necessary, national implementing measures adopted in the EU Member States whose 

venues are proposed to be recognized by the CFTC pursuant to the exempt SEF regime under CEA 

Section 5h(g). The EC, acting in accordance with the powers granted to it by the Treaty on the 

Functioning of the European Union ("TFEU") and the Treaty on European Union ("TEU"), and in 

particular Article 17 of TEU, will oversee the application of Union law, such as MiFID II, MiFIR and 

MAR, including by national competent authorities, as applicable, in the EU under the control of the 

Court of Justice of the EU. 

3. Next Steps

The CFTC staff and the EC services1

 will work as expeditiously as practicable to ensure that this 

arrangement is put into place and operating in a coordinated manner, and will continuously monitor 

the impacts resulting from the implementation to assess whether any further action is appropriate. The 

next steps foreseen are that the CFTC staff will notify the EC of its list of eligible SEFs and DCMs 

while the EC will notify the CFTC of its list of eligible MiFID II/MiFIR and MAR compliant trading 

venues. The CFTC staff and the staff of relevant national competent authorities under the coordination 

of the EC will also work towards concluding cooperation arrangements to ensure the effective 

exchange of information and coordination of supervisory activities. 

 

1 The responsible service in the European Commission is the Directorate-General for Financial Stability, 

Financial Services and Capital Markets Union.