U.S. and European derivatives regulators said Thursday that they have agreed on a common path to proceed with ongoing regulatory reforms, which will see them accommodate one another’s rules in an effort to avoid disrupting the global derivatives markets.

European Commissioner, Michel Barnier, and U.S. Commodity Futures Trading Commission (CFTC) chairman, Gary Gensler, announced an agreement regarding a package of measures for how to approach cross-border derivatives. They note that many of their reforms that aim to lower risk and promote transparency in the over-the-counter (OTC) derivatives markets are essentially identical, even though the regulatory calendars are not always synchronized.

To avoid market disruptions, the regulators said that they intend to co-ordinate implementation, and that they have agreed that jurisdictions and regulators should be able to defer to each other when it is justified by the quality of their respective regulation and enforcement regimes.

In terms of specific measures, the CFTC says that for bilateral uncleared swaps, because EU and U.S. rules for risk mitigation are essentially identical, it plans to issue no-action relief for certain transaction-based requirements. “In this regard, the EU’s system of ‘equivalence’ can be applied to allow market participants to determine their own choice of rules,” it says.

For the trading-execution requirement, the CFTC also plans relief to permit foreign boards of trade that have received direct access to list swap contracts for trading by direct access to avoid market and liquidity disruption.

Additionally, the CFTC says that as the markets and regulatory regimes continue to evolve, it will “extend appropriate time-limited transitional relief” to certain EU-regulated multilateral trading facilities (MTFs), if its’ trade execution requirement is triggered before March 15, 2014. It will also consult with the EC to consider extending regulatory relief to trading platforms that are subject to comparable requirements.

The authorities in Europe and the U.S. also pledge to continue working together on similar approaches to straight-through-processing and harmonized international rules on margins for uncleared swaps. They note that their approaches for reporting to trade repositories are also very similar, and that they will continue to work to resolve their remaining issues.

With respect to central counterparties (CCPs), they say that initial margin coverage is the only key material difference between the two regimes and that they will work together to reduce any regulatory arbitrage opportunities. They will also try to ensure that CCPs that have not yet been recognised or registered in the US or the EU will be permitted to continue their business operations.

Both sides say they aim to conclude these discussions as soon as possible, “at which stage the substance of relevant relief awarded by the CFTC will be reflected in its guidance relating to substituted compliance, as approved by its principals, while the EU equivalence decisions will have been in place, and where necessary, amended to reflect this partnership.”

“With these joint understandings, together, we’ve taken another significant step in our mutual journey to bring transparency and lower risk to the swaps market worldwide,” said Gensler.