News Centre

American Financial Exchange® Appointed To CFTC’s Market Risk Advisory Subcommittee On Benchmark Reform

Date 23/07/2020

The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced that AFX Chairman and CEO Dr. Richard L. Sandor, will serve on the U.S. Commodity Futures Trading Commission’s (CFTC) Market Risk Advisory Committee’s (MRAC) Subcommittee on Interest Rate Benchmark Reform. The Subcommittee is a cross-section from the financial services industry including clearinghouses, exchanges, intermediaries, market makers, end-users, academia and regulators.

CFTC Withdraws “ANE” Staff Advisory And Issues New Cross-Border No-Action Relief

Date 23/07/2020

In conjunction with the Commission’s approval of the final cross-border rule today, the Divisions of Swap Dealer and Intermediary Oversight (DSIO), Clearing and Risk (DCR), and Market Oversight (DMO) today withdrew a staff advisory and no-action relief regarding certain cross-border situations and issued new no-action relief.

CFTC Approves Final Cross-Border Swaps Rule And An Exempt SEF Amendment Order At July 23 Open Meeting

Date 23/07/2020

The Commodity Futures Trading Commission at its open meeting today approved a final rule on the cross-border application of certain swap provisions under the Commodity Exchange Act (CEA). This completes another principal rulemaking implementing the Dodd-Frank Act, which was enacted 10 years ago this week. Just yesterday, the Commission approved a final rule on capital requirements for swap dealers and major swap participants, closing out all required rulemakings under Section 731 of the Act. [See CFTC Press Release No. 8210-20] The Commission today also approved an Amendment Order regarding European Union trading facilities.

Supporting Statement Of CFTC Commissioner Brian Quintenz Regarding The Amendment To The Commission’s Order Exempting EU Swap Trading Facilities From SEF Registration

Date 23/07/2020

I support today’s action by the Commission to amend the order that exempts two types of trading facilities authorized within the European Union (EU) from registration with the CFTC as swap execution facilities (SEFs).  As amended, the order will authorize an additional 16 trading facilities to access US eligible contract participants (ECPs) without complying with the CFTC’s regulations or being subject to the Commission’s oversight.  These trading facilities, located in France, Germany, the Netherlands, Spain, and the UK, include the first EU-authorized trading facilities located outside of the UK to benefit from the order.

Statement Of Chairman Heath P. Tarbert In Support Of Amendment To CFTC’s 5h(g) Order For The European Union

Date 23/07/2020

I am pleased to support this amendment, which will make two important changes to our Commission’s previously issued 5h(g) Order for the European Union.  First, it will add 16 multilateral trading facilities (“MTFs”) and organized trading facilities (“OTFs”) to the list of European Union entities exempted from SEF registration under Section 5h(g) of the Commodity Exchange Act (“CEA”).  Second, it will make clear that during the remainder of the transition period relating to the withdrawal of the United Kingdom from the European Union, i.e., Brexit, the 5h(g) Order will continue to apply to UK-based MTFs and OTFs.

Dissenting Statement Of CFTC Commissioner Dan M. Berkovitz On The Final Rule For Cross-Border Swap Activity Of Swap Dealers And Major Swap Participants

Date 23/07/2020

Introduction

I dissent from today’s final cross-border swap rulemaking (the “Final Rule”).  As described by the Chairman, this Final Rule will “pare[] back our extraterritorial application of our swap dealer regime.”[1]  Over the past seven years, the current cross-border regime has helped protect the U.S. financial system from risky overseas swap activity.  The Commission should not be paring back these protections for the American financial system, particularly now, during a global pandemic.

Statement Of CFTC Commissioner Dawn D. Stump Regarding Final Rule: Cross-Border Application Of The Registration Thresholds And Certain Requirements Applicable To Swap Dealers And Major Swap Participants

Date 23/07/2020

Overview

When we met together in person late last year to consider proposing cross-border rules with respect to registration thresholds and regulatory requirements applicable to swap dealers and major swap participants (the “Proposal”),[1] I stressed that because we were proposing to replace the Commission’s 2013 cross-border guidance (the “Guidance”)[2] with binding and enforceable rules, those rules must be clear, sensible, and workable.[3]  In supporting the Proposal at the time, I concluded that the proposed rules met those standards.  And I have not seen anything in the many thoughtful comment letters we received that causes me to doubt that conclusion.   

Dissenting Statement Of Commissioner Rostin Behnam Regarding The Cross-Border Application Of The Registration Thresholds And Certain Requirements Applicable To SDs And MSPs – Final Rule

Date 23/07/2020

Introduction and Overview

Today, by approving a final rule addressing the cross-border application of the registration thresholds and certain requirements applicable to swap dealers (“SDs”) and major swap participants (“MSPs”) (the “Final Rule”), the Commodity Futures Trading Commission (“CFTC” or “Commission”) overlooks Dodd-Frank Act purposes, Congressional mandates thereunder, an opinion of the D.C. District Court, and multiple comments raising significant concerns.  The Commission instead relies on broad deference that opens a gaping hole in the federal regulatory structure.  I cannot support a decision to jettison a cross-border regime that has not proven unreasonable, inflexible, or ineffective in favor of an approach that fails to address the most critical concerns that the Dodd-Frank Act directed the CFTC to address in favor of “more workable” solutions.  As the Final Rule opts to address the conflicts of economic interest between the regulated and those who are advantaged by it by usurping Congressional (and congressionally delegated) authority to rethink section 2(i) of the Commodity Exchange Act (“CEA” or “Act”) via prescriptive rules, I must respectfully dissent.

Supporting Statement Of CFTC Commissioner Brian Quintenz Regarding The Cross-Border Application Of The Registration Thresholds And Certain Requirements Applicable To SDs And MSPs – Final Rule

Date 23/07/2020

I am very pleased to support today’s final rule interpreting Congress’ statutory directive that the Commission may only regulate those foreign activities that “have a direct and significant connection with activities in, or effect on commerce, of the United States.”  As I noted when I supported the proposal last December, Congress deliberately placed a clear and strong limitation on the CFTC’s extraterritorial reach, recognizing the need for international comity and deference in a global swaps market.  Today’s rule provides important safeguards to the US financial markets in delineating which cross-border swap activity must be counted towards potential registration with the Commission, and which transactions should be subject to the CFTC’s business conduct requirements for swap dealers (SDs) and major swap participants (MSPs).  At the same time, the final rule appropriately defers to foreign regulatory regimes to avoid duplicative regulation and disadvantaging U.S. institutions acting in foreign markets.

Statement Of CFTC Chairman Heath P. Tarbert In Support Of Final Cross-Border Swap Rule

Date 23/07/2020

President John Adams once warned: “Great is the guilt of unnecessary war.” While he was obviously referring to military conflicts, his admonition applies to conflicts among nations more generally. Financial regulation has not been exempt from international discord.