CFTC Considers Taking its Derivatives Trading Rules Overseas


According to the Wall Street Journal, the Commodity Futures Trading Commission may be looking to force the derivatives trading rules the Commission has implemented in the US onto foreign markets.

The CFTC had agreed to delay the deadline for foreign markets to comply to US trading rules while the European Commission and other foreign regulators came up with their own derivatives trading rules in hopes that they could all work together in policing the $693 trillion dollar market. However, having decided that foreign regulators haven’t been strict enough, the CFTC is now considering ignoring foreign rules, and enforcing US regulations onto all overseas entities linked to US derivative trading.

The CFTC’s continued march forward in its implementation of derivatives trading rules despite lagging foreign counterparts has drawn criticism from many who feel that doing so is an affront to the G-20 agreement to coordinate international rule-making through the Financial Stability Board.

Experts in the field also claim that forcing overseas entities to adhere to CFTC rules will cause unnecessary double reporting, which would be both time consuming and costly.

It’s interesting to see the CFTC still pursuing such strict overseas rules, as the Commission was sued just last month by US financial groups over the same matter.

The CFTC will be holding a meeting later this week to finalize their recommendations before the new derivatives trading rules go into effect.

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About the Author

Felix Shipkevich
Mr. Shipkevich’s practice focuses on regulatory, transactional, and enforcement matters in the fields of futures, commodities, and derivatives. He works with Futures Commission Merchants (FCMs), Retail Forex Exchange Dealers (RFEDs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), Commodity Trading Advisors (CTAs), Swap Dealers (SDs), Swap Execution Facilities (SEFs), and domestic and offshore hedge funds. Mr. Shipkevich guides clients on procedures related to registration with the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), as well as domestic and international regulators in local jurisdictions. Mr. Shipkevich prepares and helps implement compliance, anti-money laundering (AML), and Electronic Trading Systems (ETS) procedures for clients in the commodities and derivatives fields.