The impacts of the Commodities Futures Trading Commission’s (CFTC) response to cross-border swaps are yet unknown. With a 75 day period of guidance in addition to the implementation of the final ruling, this unprecedented move by the CFTC may deeply impact the market.

On Friday, July 12th, the CFTC voted 3-1 in favor of instituting final guidelines for regulating cross-border bilateral swaps. Gary Gensler, in his opening statement said that “Even though we oversee, here at the CFTC, a complex and sometimes difficult to understand market […] the questions the American people are looking for us to answer are simple: Have we lowered risk? Have we brought transparency to these markets? […] This is why reform matters.”

The presenters of the cross-border rules also went on to define certain aspects of the bill. When discussing the definition of “US-Person,” they widened the definition to include natural born US citizens, businesses with principal or primary stations in the United States and funds if they were majority owned by US Citizens. Other important aspects of these guidelines include ‘unfettered’ access to other counties’ data. According to the meeting, the CFTC has set up relationships for substituted compliance with Australia, Canada, Japan, and the EU, with ongoing talks with some entities in Switzerland and Hong Kong.

The full proceedings are available on the CFTC’s website.