Which US markets are now considered equivalent to EU regulated markets?
The European Commission has adopted a decision declaring that a number of United States exchanges supervised by the US Securities Exchange Commission (SEC) are equivalent to EU regulated markets. As a result, derivatives traded on these US exchanges will now be treated as exchange-traded derivatives under EU law.
In addition, the Commission has also amended its equivalence decision regarding US central counterparties (‘CCPs’). It now covers certain products (e.g. mortgage-backed securities issued or guaranteed by certain government sponsored agencies traded on a ‘To-Be-Announced basis’ (‘TBAs’).
Regulated Markets: Title III of Directive 2014/65/EU
An EU regulated market means a regulated market which is authorised and functions regularly and in accordance with Title III of Directive 2014/65/EU on markets in financial instruments directive of 15 May 2014.
Title III contains a number of requirements in order to be establish a market as being regulated. In Commission Implementing Decision (EU) 2022/552, it states that the legally binding requirements applicable to national stock exchanges (NSEs) authorised in the USA, delivers results that are in substance equivalent to the requirements laid down in Title III of Directive 2014/65/EU in the following areas:
- Authorisation process,
- Definitional requirements,
- Access to the recognised exchange,
- Organisational requirements,
- Admission of financial instruments to trading,
- Suspension and removal of instruments from trading,
- Monitoring of compliance and
- Access to clearing and settlement arrangements.
Therefore, the Commission has concluded that the legally binding requirements for NSEs established in the USA are equivalent to the requirements laid down in Title III of Directive 2014/65/EU.
The markets which are considered equivalent are limited to the NSEs listed in the Annex to Commission Implementing Decision (EU) 2022/552.
List of EU regulated markets
Article 47 of Directive 2004/39/EC requests EU countries to draw a list of the regulated markets in their territories and notify that list to the Commission and other Member States. Regulated markets are those markets in financial instruments which are recognised by national competent authorities and function in accordance with the provisions of MiFID rules.
The European Securities and Markets Authority (ESMA) has created a database which provides a compilation of the information notified from all national competent authorities in this respect. The database is regularly updated and provides a list of the regulated markets in each EU country.
National Securities Exchanges registered with the US Securities and Exchange Commission considered equivalent to regulated markets
The following US national stock exchanges are currently considered equivalent to EU regulated markets:
- BOX Exchange LLC,
- Cboe BZX Exchange, Inc.,
- Cboe C2 Exchange, Inc.,
- Cboe EDGX Exchange, Inc.,
- Cboe Exchange, Inc.,
- Miami International Securities Exchange, LLC,
- MIAX Emerald, LLC,
- MIAX PEARL, LLC,
- Nasdaq GEMX, LLC,
- Nasdaq ISE, LLC,
- Nasdaq BX, Inc.,
- Nasdaq MRX, LLC,
- Nasdaq PHLX, LLC,
- Nasdaq Options Market, LLC,
- NYSE American Options, LLC, and
- NYSE Arca, Inc.
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