MFA finalized a discussion paper on equivalence issues under Article 13(3) of the European Market Infrastructure Regulation (EMIR). In the paper, MFA discusses a key outstanding issue with respect to Article 13 of EMIR and the European Commission’s (Commission) adoption of an implementing act on equivalence in respect of the U.S. In particular, certain alternative investment funds (AIFs) are legally incorporated outside the U.S. but are managed by a U.S.-based manager or are majority-owned by U.S. persons, and thus, these AIFs are considered “U.S. persons” subject to the Commodity Futures Trading Commission’s (CFTC) derivatives rules. However, when trading with a counterparty established in the European Union (EU) that is subject to EMIR, if the Commission does not regard the AIF as being “established” in the U.S. for purposes of Article 13, then both the AIF and its EU counterparty would need to comply with both CFTC rules and EMIR. Therefore, in the discussion paper, MFA recommends that the Commission clarify that, for purposes of Article 13, “established” in a third country does not only mean where an entity is legally incorporated, but also includes any third country that regulates that entity as a person “established” in that third country.