No GATS no glory : the EU regulation of clearinghouses and WTO law

Abstract

Following the 2008 financial crisis the EU reformed the regulatory regime pertaining to clearinghouses (or CCPs), and in particular the clearing of over-the-counter (OTC) derivatives. This paper evaluates whether the EU regime for CCPs is consistent with WTO Law and discusses how regulatory and market access (trade) objectives can be better managed. A number of problems of both procedural and substantive nature are identified with the EU regime for CCPs, and specifically the equivalence mechanism to assess third country clearinghouses (EMIR Art. 25), with onerous implications for many non-EU service suppliers seeking to provide their services inside the EU internal market. Smaller countries are less likely to have access to the EU market and to be negatively impacted by the EU regime.