Monday, April 16, 2012

Commissioner Walter Tells Senate Panel that SEC is Coordinating Cross-Border on OTC Derivatives Regulation

Given the global nature of the OTC derivatives market, the SEC intends to address the international implications of its regulations under Sub B, Title VII of Dodd-Frank in a single proposal in order to give interested parties, including investors, market participants, and foreign regulators, an opportunity to consider as an integrated whole the Commission's approach to the registration and regulation of foreign entities engaged in cross-border security-based swap transactions involving U.S. parties. This was the message that SEC Commissioner Elisse Walter delivered to the Senate Banking Committee.

In her testimony, Commissioner Walter said that the SEC understands that its approach to the cross-border application of Title VII must both achieve effective effective domestic regulatory oversight and reflect the realities of the global derivatives market. The SEC is continuing to actively coordinate with its counterparts in other jurisdictions to help achieve consistency and compatibility among approaches to derivatives regulation.

The Commissioner also noted that the SEC and CFTC staff have been working on a bilateral basis with counterparts from Canada, the European Union, Hong Kong, Japan, and Singapore to coordinate technical issues that are in the interest of leveling the playing field for the regulation of derivatives transactions. In December, leaders and senior representatives of the authorities responsible for the regulation of the OTC derivatives markets in these jurisdictions met in Paris to discuss significant cross-border issues related to the implementation of new legislation and rules governing the OTC derivatives markets, including concerns about possible regulatory gaps, conflicts, arbitrage, and duplication. In addition to agreeing to continue staff-level bilateral technical dialogues, the leaders are planning to meet again as a group this spring.