Guidance Related to Cross-Border Application of Certain Swaps Provisions
Summary
SIFMA provides comments to the Commodity Futures Trading Commission (CFTC) on proposed interpretive guidance on the cross-border application of certain swaps provisions of the Commodity Exchange Act, RIN 3038-AD57. The guidance would provide clarity as to the reach and intent of the new Title VII swap regulatory landscape under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). SIFMA does not believe the proposed interpretive guidance strikes this balance correctly, and shares concerns that the proposed regime reaches beyond the CFTC’s statutory authority and threatens to disrupt significantly the swaps market both in the United States and worldwide.
Excerpt
Mr. David A. Stawick
Secretary of the Commission
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
Re: Comment Letter on the Proposed Interpretive Guidance on the Cross-Border Application of Certain Swaps Provisions of the Commodity Exchange Act (RIN 3038-AD57)
Dear Mr. Stawick:
The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to provide the Commodity Futures Trading Commission (the “Commission”) with comments regarding the Proposed Interpretive Guidance on the Cross-Border Application of Certain Swaps Provisions (the “Proposed Interpretive Guidance”).2
We appreciate the Commission’s efforts to provide clarity as to the reach and intent of the new Title VII swap regulatory landscape. We understand that the Commission strives to balance effective oversight of the U.S. swap market with the congressionally mandated restriction on the Commission’s cross-border jurisdiction in Section 2(i) of the Commodity Exchange Act (the “CEA”). However, we do not believe the Proposed Interpretive Guidance strikes this balance correctly, and we are concerned that the proposed regime reaches beyond the Commission’s statutory authority and threatens to disrupt significantly the swaps market both in the United States and worldwide.
Our Key Conceptual Concerns with the Proposed Interpretive Guidance. In Annex A, we describe our key concerns with the Proposed Interpretive Guidance and the ways in which it could be revised to better achieve congressional intent and facilitate a smoother transition toward Title VII implementation. Although we have already separately commented on the Commission’s Proposed Exemptive Order Regarding Compliance with Certain Swap Regulations (the “Proposed Exemptive Order”), 3 the provisions of the Proposed Interpretive Guidance are in many instances closely interlinked with those in the Proposed Exemptive Order; we will therefore reference the Proposed Exemptive Order where necessary to analyze fully the issues presented in the Proposed Interpretive Guidance.