Extra-Territorial Regulatory Action in the Financial Markets: Does the EU Third-Country Central Counterparty Regime Go Too Far?

This article considers how to evaluate extra-territorial regulation, and it makes particular reference to the European Union’s recent proposals for the European Market Infrastructure Regulation (‘EMIR’). Extra-territorial regulatory action is inherently controversial; however it has become increasingly commonplace in the financial markets since 2008 and, especially, Brexit. The article proposes a normative framework based upon Global Administrative Law, and analyses the so-called ‘EMIR 3.0’ proposals for third country central counterparties (CCPs) accordingly. This analysis locates the ongoing debates about the EMIR 3.0 regime in a wider, scholarly context and throws light on the proportionality and efficacy of the proposals. The article also suggests a technique for the review of extra-territorial financial regulation more broadly, arguing that Global Administrative Law provides a valuable way of evaluating substance and of holding decision-makers to account.