Supplemental Arrangement to 2016 Memorandum of Understanding 

Related to ESMA's Assessment of Compliance and Monitoring of the Ongoing 

Compliance with Recognition Conditions by Derivatives Clearing Organizations 

Established in the United States 

This arrangement ("Arrangement") between the Commodity Futures Trading Commission 

("CFTC") and the European Securities and Markets Authority ("ESMA") supplements and 

complements the Memorandum of Understanding Related to ESMA's Assessment of 

Compliance and Monitoring of the Ongoing Compliance with Recognition Conditions by 

Derivatives Clearing Organizations Established in the United States (2 June 2016) ("2016 

MoU") in order to reflect Regulation (EU) No 648/2012 of the European Parliament and of the 

Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories as 

amended ("EMIR"). This Arrangement does not alter the terms and provisions of the 2016 

MoU except as set forth below. 

This Arrangement recognizes that Regulation (EU) No 2019/2099 ("EMIR 2.2") amended 

EMIR, enhanced the European Union ("EU") framework for recognition and supervision of 

third-country central counterparties ("CCPs"), and expanded the role and powers of ESMA. 

Under Article 25(2a) of EMIR and Commission Delegated Regulation (EU) 2020/1303 of 14 

July 2020 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the 

Council with regard to the criteria that ESMA should take into account to determine whether a 

central counterparty established in a third country is systemically important or likely to become 

systemically important for the financial stability of the Union or of one or more of its Member 

States, ESMA considers the systemic importance of a third-country CCP applying or having 

applied for recognition based upon specified criteria, elements and indicators. Based upon an 

assessment of the elements of the criteria and the indicators, ESMA determines whether the 

CCP is not or is not likely to become systemically important (a Tier 1 CCP) or is or is likely to 

become systemically important (a Tier 2 CCP) and this determination is reviewed periodically 

as per Article 25(5) of EMIR. 

With respect to CCPs defined as "Covered CCPs" within the scope of the 2016 MoU, 1 

cooperation under the 2016 MoU between ESMA and the CFTC (each an "Authority" under 

the 2016 MoU and, together, the "Authorities") includes ESMA's assessment of compliance 

and monitoring of the ongoing compliance by the Covered CCPs with the recognition 

conditions set out in Article 25 of EMIR and with the conditions in paragraphs 2 and 3 of Article 

1 ("Equivalence Conditions") in the European Commission Implementing Decision (EU) 

2016/377 of 15 March 2016, except for agricultural commodity derivative contracts fulfilling the 

conditions set out in Article 2 of that Commission Implementing Decision ("Exemption 

Conditions") (collectively, "Recognition Conditions"). This Arrangement recognises that 

cooperation under the 2016 MoU, which may be understood to include certain requests by 

ESMA consistent with Article 25(7)(a) of EMIR for information concerning a Covered CCP, also 

includes ESMA's periodic reviews of a Covered CCP's recognition and tiering pursuant to 

Article 25(5) of EMIR and monitoring of regulatory and supervisory developments pursuant to 

1 Such Covered CCPs do not include CCPs falling within the scope of the Enhanced Memorandum of 

Understanding Related to ESMA 's Assessment of Compliance and Monitoring of the Ongoing Compliance with 

Recognition Conditions by Certain Derivatives Clearing Organizations Established in the United States (6 January 

2021). 
Articles 25(6b) and 25(7)(e) of EMIR. Article 25(7) of EMIR provides for ESMA confidentially 

to inform the European Commission of any failure by any third-country authority to apply 

provisions of a cooperation arrangement (such as the 2016 MoU as supplemented and 

complemented by this Arrangement), and the European Commission may decide to review its 

implementing act on equivalence for that third country. 

This Arrangement supplements and complements the 2016 MoU as follows: 

1 . Article 1 : 

a) The definition of "Emergency Situation" in Article 1(d) of the 2016 MoU means the 

occurrence of an event that could materially impair the financial or operational condition 

of a Covered CCP, including developments in financial markets which may have an 

adverse effect on market liquidity and the stability of the financial system in the EU or 

one of its Member States. 

b) The definition of "Governmental Entity" in Article 1 (e)(ii) of the 2016 MoU also includes, 

if the Requesting Authority is ESMA: 

i. the central bank(s) of issue of any of the EU currencies of the financial instruments 

cleared or to be cleared by the Covered CCP ("CBI"); or 

ii. each of the members, except for the chair and the two independent members who 

are staff of ESMA, of the third-country CCP college described in Article 25c of EMIR 

in their legal capacity as members of the college and for purposes of their college 

responsibilities with regard to a Covered CCP. 

2. Article 3: 

a) Periodic Reviews and Monitoring of Regulatory and Supervisory Developments: 

Circumstances where cooperation between the Authorities will be most useful, as 

contemplated under Article 3(3) of the 2016 MoU, include: 

i. the periodic review by ESMA of a Covered CCP's recognition and tiering pursuant 

to Article 25(5) of EMIR; and 

ii. the monitoring by ESMA, pursuant to Articles 25(6b) and 25(7)(e) of EMIR, and by 

the CFTC of relevant Laws and Regulations (as defined in Article 1 (f) of the 2016 

MoU), including proposals to materially change regulatory requirements applicable 

to Covered CCPs, and changes to regulatory status or requirements that could 

result in a change in the regulatory status of, relief granted to, or supervisory 

treatment of a Covered CCP. 

b) Emergency Situations: Under Article 3(2) of the 2016 MoU, the Authorities recognise 

in particular the importance of close cooperation in the event that a Covered CCP 

experiences, or is threatened by, a potential financial crisis or other Emergency 

Situation (as defined in Article 1 (d) of the 2016 MoU, as supplemented in Paragraph 

1 (a) above). An Authority should provide notification to the other Authority consistent 

with Article 3(4) of the 2016 MoU, as supplemented by Paragraph 2(c) below, and 

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should keep the other Authority appropriately informed throughout an Emergency 

Situation. The CFTC should lead in such an Emergency Situation and should consult 

with and take account of the views of ESMA to the greatest extent possible. As 

necessary, ESMA should coordinate with the relevant CBl(s) regarding such 

Emergency Situation of a Covered CCP and any emergency measures that the CBI 

may consider appropriate. 

c) Notification: Under Article 3(4)(a) of the 2016 MoU, any known material event that 

could adversely impact the financial or operational stability of a Covered CCP includes, 

in an Emergency Situation, general information on the nature of the Emergency 

Situation and any action taken or likely to be taken as far as known to the Authority 

including, e.g., actual or prospective use of the Covered CCP's default protections or 

recovery plans, or measures taken or plans to address the default or potential default 

of a clearing member or clearing participant. 

d) Annual Information Provision: Cooperation under Article 3(1) of the 2016 MoU includes 

cooperation regarding the provision of information concerning Covered CCPs to ESMA 

on an annual basis as set out in relevant arrangements signed by duly authorised 

officials of the Authorities which are intended to complement the 2016 MoU as 

supplemented by this Arrangement regarding the scope of such information. 

3. Article 4: 

a) Under Article 4(1) of the 2016 MoU, a request for written information pursuant to Article 

3(5) of the 2016 MoU generally should include to whom, if anyone, including any 

Governmental Entity (as defined in Article 1 (e) of the 2016 MoU, as supplemented) 

onward disclosure of information is likely to be necessary and the reason for any such 

disclosure. Any request for information pursuant to Article 3(5) of the 2016 MoU will 

be assessed on a case-by-case basis by the Requested Authority (as defined in Article 

1 (i) of the 2016 MoU) to determine whether the information can be provided ( either in 

part or in whole) under the terms of the 2016 MoU (as supplemented and 

complemented by this Arrangement) and in accordance with applicable Laws and 

Regulations (as defined in Article 1 (f) of the 2016 MoU). Such Requested Authority will 

consult with the Requesting Authority (as defined in Article 1 U) of the 2016 MoU) in 

responding to a request. 

b) The Administrative Arrangement for the transfer of personal data (AA) between 

authorities in the European Economic Area (EEA) and non-EEA authorities sets forth 

certain safeguards for the transfer of personal data as defined therein. As signatories 

to the AA, the Authorities acknowledge that they will act consistent with the AA with 

respect to the transfer of personal data between them. 

c) The 2016 MoU, as supplemented by this Arrangement, recognises the role of the 

European Central Bank and other CBls (as defined in Paragraph 1(b)(i) above) under 

EMIR. Any request for information submitted by ESMA to the CFTC on behalf of a CBI 

will be submitted in a manner consistent with Appendix A. 

4. Article 7: Notification under Article 7(2)(a) of the 2016 MoU by a Requesting Authority (as 

defined in Article 1 U) of the 2016 MoU) to a Requested Authority (as defined in Article 1 (i) 

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of the 2016 MoU) of the need, as required by law, to share non-public information obtained 

under the 2016 MoU with a Governmental Entity (as defined in Article 1(e) of the 2016 

MoU, as supplemented) will be supplied in writing to such Requested Authority fifteen 

business days in advance of onward sharing of the information by the Requesting 

Authority. 

5. Entry into Force: This Arrangement will enter into force on the date that it is signed by 

ESMA and the CFTC. 

Signatures

European Securities and Markets Authority U.S. Commodity Futures Trading Commission 

Verena Ross 

Chair 

Date signed: March 9, 2022 

Rostin Behnam 

Chairman 

Date signed: March 7, 2022 

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Appendix A

Requests from a Central Bank of Issue for Information on a Covered CCP 

1. Pursuant to the terms and conditions of the 2016 MoU, as supplemented by this 

Arrangement, ESMA may share, as set out in Article 7(2) of the 2016 MoU, as 

supplemented, non-public information obtained from the CFTC under the 2016 MoU with 

certain Governmental Entities (as defined in Article 1(e) of the 2016 MoU, as 

supplemented). Where a CBI (as defined in Paragraph 1 (b)(i) of this Arrangement) seeks 

information on a Covered CCP not otherwise provided to ESMA in connection with 

Paragraph 2(d) of this Arrangement, the CBI may request such information through 

consultation with ESMA and submission of a written request by ESMA to the CFTC 

pursuant to Article 4(1) of the 2016 MoU, as supplemented by Paragraph 3 of this 

Arrangement. A request form is annexed to this Appendix A (Annex A.1 ). 

2. The information that may be requested by a CBI includes: 

a) information concerning financial instruments denominated in the EU currency of the 

CBI that are cleared or to be cleared by the Covered CCP; and 

b) information in connection with the CBI addressing an Emergency Situation (as defined 

in Article 1 (d) of the 2016 MoU, as supplemented by Paragraph 1 (a) of this 

Arrangement), in coordination with ESMA as contemplated by Article 3(2) of the 2016 

MoU, as supplemented by Paragraph 2(b) of this Arrangement. 

3. Pursuant to Article 7(2)(b) of the 2016 MoU and prior to sharing any non-public information 

with a CBI, ESMA will provide the CFTC with adequate assurances by the CBI concerning 

the CBl's use and confidential treatment of the information. The necessary assurances 

are included in Annex A.1. 

4. In a manner consistent with Article 3(5) of the 2016 MoU, requests will be made with the 

goal of minimizing administrative burdens. The CFTC will assess any request on a caseby-case basis to determine whether the information can be provided (either in part or in 

whole) under the terms of the 2016 MoU, as supplemented by this Arrangement, and in 

accordance with applicable Laws and Regulations (as defined in relation to the CFTC in 

Article 1 (f) of the 2016 MoU). 

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Annex A.1 

ESMA Request Form 

This confidential request to the CFTC is being made pursuant to Article 4(1) and under the 

provisions of the Memorandum of Understanding Related to ESMA 's Assessment of

Compliance and Monitoring of the Ongoing Compliance with Recognition Conditions by

Derivatives Clearing Organizations Established in the United States (the "2016 MoU"). 

ESMA and the CBI recognise that the 2016 MoU is supplemented by the terms and 

provisions of the Supplemental Arrangement to 2016 Memorandum of Understanding 

Related to ESMA 's Assessment of Compliance and Monitoring of the Ongoing Compliance 

with Recognition Conditions by Derivatives Clearing Organizations Established in the United 

States (the "Supplemental Arrangement"). 

Name of the CBI 

Legal basis for onward 

disclosure by ESMA to the CBI 

Information sought by the CBI

Description of the matter that is 

the subject of the request and 

purpose for which the 

information is sought, including 

applicable laws and regulations 

Desired time period for reply 

and, where appropriate, the 

urgency thereof 

Personal data: The CBI represents that it will protect any personal data transferred by the 

CFTC to ESMA and subsequently onward shared by ESMA to the CBI to the full extent of 

the safeguards provided under applicable European and national laws and regulations on 

the treatment of personal data. 

Permissible use: The CBI confirms that it will use any non-public information obtained 

from ESMA in connection with this request under the 2016 MoU, as supplemented by the 

terms and provisions of the Supplemental Arrangement, solely for the purpose set forth in 

this form and in a manner consistent with applicable laws and regulations. Before using 

the non-public information for any other purpose, the CBI first must obtain the written 

consent of the CFTC for the intended use. 

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Confidentiality: The CBI will keep confidential, to the extent permitted by law, this request, 

the contents of this request, and all non-public information obtained from ESMA in 

connection with this request under the 2016 MoU, as supplemented by the terms and 

provisions of the Supplemental Arrangement. To the extent possible, the CBI intends to 

notify the CFTC of any legally enforceable demand for the non-public information prior to 

complying with the demand and intends to assert all appropriate legal exemptions or 

privileges with respect to such information as may be available. 

Written Assurances under Article 7(2)(b) of the 2016 MoU: The CBI confirms that: 

i. The CBI requires the requested information for a purpose within the scope of the CB l's 

jurisdiction; and 

ii. The requested information will not be shared by the CBI with other parties without 

getting the prior written consent of the CFTC. 

For ESMA 

Signature: 

Name: 

Title: 

Phone Number: 

Email Address: 

Date: 

For the CBI 

Signature: 

Name: 

Title: 

Phone Number: 

Email Address: 

Date: 

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