SIFMA v. CFTC: Cross-border Scope Goes Too Far
October 23, 2012
NEW YORK -- The Commodity Futures Trading Commission’s proposals to make “non-U.S. persons” register as swap dealers in the United States go too far, Securities Industry and Financial Markets Association chief executive Tim Ryan said at the trade group’s annual meeting here.
The commodity futures regulator’s plan to oversee swaps made by foreign firms with U.S. participants departs from international standards and needs to be re-thought, Ryan said.
The regulator’s guidance on the cross-border application of its swap dealership rules “breaks from standards of international comity by giving US regulators unprecedented regulatory scope over activities taking place in Europe, Asia and other jurisdictions,” he said.
“Fine-tuning is expected,’’ Gensler said. “We welcome inquiries from market participants. My fellow commissioners and I, along with the CFTC staff, are all committed to sorting through issues as they arise.’’
Ryan said there has been an “unprecedented outcry’’ from G20 finance ministers and regulators about some the extraterritorial impact of Dodd-Frank Wall Street Reform Act rule-making, including not just this derivative reform but also the Volcker Rule, which would preclude banks from trading with their own shareholders’ capital.
But the oversight of foreign firms and the thresholds on which should have to register with the CFTC need to be reworked, he said, as Asia and Europe move in different directions on the same question.
“It’s time to step back, review what we are trying to accomplish, and find a better
approach to getting it done,’’ he said. “We cannot afford conflicting and overlapping rules proposals which produce extended uncertainty for everyone in the economy.’’
But cross-border application of swaps market reforms are not going away, Gensler said.