The CFTC Cross-Border Phase-In Exemptive Order and Final Interpretive Guidance
Summary
The Asset Management Group of SIFMA (SIFMA AMG) provides comments to the Commodity Futures Trading Commission (CFTC) on the CFTC’s exemptive order regarding compliance with cross-border swap regulations (RIN 3038-AE85) and interpretive guidance and policy statement regarding compliance with cross-border swap regulations (RIN 3038-AD85).
SIFMA AMG’s letter:
- Asks for additional time to comply with the U.S. person definition (until December 21, 2013 for assessment and identification and March 31, 2014 for compliance);
- Seeks an explicit recognition by the CFTC that asset managers have the discretion to determine in good faith, based on the facts and circumstances that they deem most relevant, whether a fund’s principal place of business is in the U.S.;
- Asks for clarification that funds that are publicly offered or privately offered to only non-U.S. persons should categorically be non-U.S. persons; and
- Requests substitute compliance be available for all entities, including funds and other asset management clients.
Excerpt
Ms. Melissa D. Jurgens
Secretary of the Commission
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
Re: Comment Letter on the Exemptive Order Regarding Compliance with Certain Swap Regulations (RIN 3038-AE85) and Interpretive Guidance and Policy Statement Regarding Compliance with Certain Swap Regulations (RIN 3038-AD85)
Dear Ms. Jurgens:
The Asset Management Group (the “AMG”) 1 of the Securities Industry and Financial Markets Association (“SIFMA”) appreciates the opportunity to provide its views to the Commodity Futures Trading Commission (the “Commission”) on the Exemptive Order Regarding Compliance with Certain Swap Regulations (the “Exemptive Order”)2 and Interpretive Guidance and
Policy Statement Regarding Compliance with Certain Swap Regulations (the “Guidance”).3 The AMG continues to have concerns with the Commission’s approach to the cross-border application of its swap regulations, and in particular the U.S. person definition set out in the Guidance. The definition is overly broad and, in many cases, creates uncertainty in the application of the Commission’s regulations. Moreover, the Exemptive Order provides far too little time for asset managers and their clients to assess their status under this complex and subjective definition and to come into compliance with the U.S. rules, exacerbating the difficulty of the interpretive questions and practical challenges arising from implementation of the Guidance’s U.S. person definition. This letter provides our views, and recommendations for the Commission, on the Exemptive Order and the Guidance, which is integrated into and closely linked with the Exemptive Order.