Recital 2

(2)However, when adopting Implementing Decision (EU) 2021/85, the Commission did not assess whether CCPs qualified as covered clearing agencies are to comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012 with regard to mortgage-backed securities issued or guaranteed by the government sponsored agencies Federal National Mortgage Association (‘Fannie Mae’), the Federal Home Loan Mortgage Corporation (‘Freddie Mac’) or the Government National Mortgage Association (‘Ginnie Mae’) that are traded on To-Be-Announced basis (‘TBAs’). TBAs do not exist in the Union. They are essentially forward or delayed delivery products, and under the rules and interpretation of the Commodity Futures Trading Commission and the SEC, TBAs are excluded from the definition of ‘swap’ and ‘security-based swap’ ³ . Moreover, trading of TBAs takes place both on a purely bilateral basis and, to a lesser extent, on inter-dealer broker platforms. In order for the applicable legal and supervisory arrangements in the USA regarding the central clearing of TBAs to be considered equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012, the substantive outcome of those legal and supervisory arrangements should be equivalent in respect of the regulatory objectives those legal and supervisory arrangements achieve. The purpose of the equivalence assessment is therefore to verify whether the legal and supervisory arrangements of the USA ensure that CCPs which clear TBAs do not expose clearing members and trading venues established in the Union to a higher level of risk than the level of risk those clearing members and trading venues would be exposed to by CCPs authorised in the Union and, consequently, do not pose unacceptable levels of systemic risk in the Union.