CFTC Guidance on Extraterritoriality: CFTC Releases Proposed Guidance on and Exemptive Relief from Cross-Border Application of Certain Swaps Provisions of the Commodity Exchange ActSullivan & Cromwell LLP - July 12, 2012
On June 29, 2012, the Commodity Futures Trading Commission (“CFTC”) issued proposed guidance (“Proposed Guidance”) on the cross-border application of certain swaps provisions under the Commodity Exchange Act (“CEA”) and a proposed exemptive order (“Proposed Exemption”) that would delay the obligation to comply with certain entity-level requirements for non-U.S. (or foreign) swap dealers and major swap participants (“MSPs”). The Proposed Guidance and Proposed Exemption were both approved unanimously by the CFTC by private vote. The Proposed Guidance and Proposed Exemption were issued eight days after a scheduled public meeting by the Commissioners to approve these releases was cancelled shortly before it was set to begin. The last-minute cancellation, as well as the concurring statements issued by Commissioners Sommers and O’Malia, suggests that the proper scope of the CFTC’s authority is still subject to debate within the CFTC.
The comment period for the Proposed Guidance is open for 45 days after the publication in the Federal Register and the comment period for the Proposed Exemption is open for 30 days after the publication in the Federal Register.