CFTC White Paper Calls for Overhaul of Cross-Border Swaps Regulatory Framework

In a white paper published today, Commodity Futures Trading Commission Chairman Christopher Giancarlo called for changes to the CFTC’s regulatory framework for internationally traded swaps and highlighted several problems with its current approach.

Specifically, Giancarlo noted that the current framework — which has only been set forth in guidance rather than a formal rulemaking — is “over-expansive, unduly complex, and operationally impractical.” He recommended, among other things, reforms that would expand the use of the CFTC’s exemptive authority for non-U.S. central counterparty clearinghouses; adopt an approach that permits non-U.S. persons to rely on substituted compliance with respect to the swap clearing and trade execution requirements in comparable jurisdictions; and take a territorial approach to U.S. swaps trading activity.