Thursday, June 03, 2010

Congress Heeds G-20 Call for Int'l Consensus in Derivatives Regulation

The G-20, including the United States, has endorsed efforts to coordinate international financial policy and regulations as nations reform their financial regulatory systems. A focus on reaching international consensus is important as legislation moves forward.

In order to promote the effective and consistent global regulation of swaps and security-based swaps, House and Senate reform legislation direct the CFTC and the SEC to consult and coordinate with foreign regulators on the establishment of consistent international standards with respect to the regulation of swaps and security-based swaps. As part of international harmonization efforts, the SEC and CFTC are authorized to enter into information-sharing arrangements with foreign regulators that the Commissions deem necessary or appropriate in the public interest or for the protection of investors, swap counterparties, and security-based swap counterparties.

The House bill also directs the CFTC to promote effective and consistent global regulation of contracts of sale of a commodity for future delivery by consulting and coordinating with foreign regulators on the establishment of consistent international standards with respect to the regulation of contracts of sale of a commodity for future delivery. In that context, the CFTC is authorized to enter into information-sharing arrangements with foreign regulators as may be deemed necessary or appropriate in the public interest for the protection users of contracts of sale of a commodity for future delivery.

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