CFTC Asked to Delay Expiration of Swaps Rules Exemption

The E.U. has asked for a delay in the enforcement of new swaps rules set to take effect on July 12, when the exemptions for overseas banks of the Dodd-Frank Act expire. In a report by Bloomberg.com, the European Commission addressed Gary Gensler, the head of the U.S. Commodity Futures Trading Commission. The EC requested the expiration date of the exemptions to be pushed back in hopes that there would be more time for the Group of Twenty to agree upon new rules. According to Bloomberg.com, the joint letter by the EC’s “director general for internal market and services,” Jonathan Faull, and Steven Maijoor, chairman of the European Securities and Markets Authority” called for an extension or else “EU firms would face huge legal and operational uncertainty.” The temporary exemption allowed foreign banks and foreign branches of banks to avoid having to register with the CFTC, and also avoid having to follow overlapping regulations. Syed Kamall, a member of the European Parliament stated that if the CFTC does not delay the expiration, the market should expect “regulatory arbitrage, which businesses will seek to exploit.”