In
a letter to CFTC Chair Gary Gensler, the US Chamber of Commerce expressed
concern about reports that the Commission intends to address the extraterritorial
application of the swaps dealer provisions of the Dodd-Frank Act through interpretative
guidance rather than in a release that the Commission denominates a substantive
rule and promulgates according to the procedures required for such rules. The
Chamber noted suggestions that the Commission is considering proceeding in this
manner to avoid the requirements of Section 15(a) of the Commodity Exchange
Act, which directs the Commission to evaluate the costs and benefits of its
actions in light of their effects on efficiency, competitiveness, and price
discovery.
The
Chamber urged the CFTC to conduct a full rulemaking, taking and
considering public comments on the proposal in accordance with the
Administrative Procedure Act and giving full consideration to the economic
consequences of its action. In the Chamber’s view, setting an appropriate scope
for Dodd-Frank’s extraterritorial application is crucial for achieving
effective cross-border swaps regulation.
The
letter went on to express the Chamber’s agreement with the position of European
Commissioner for the Internal Market Michel Barnier that
where the rules of a foreign country are comparable and consistent with the
objectives of U.S. law, it is reasonable to expect U.S. authorities to rely on
those rules and recognize activities regulated under them as compliant with U.S. regulations. The Chamber cautioned that an overly-broad
extraterritorial application of new derivatives regulations could create
competitive disadvantages for U.S. U.S.
firms could have to comply with U.S. U.S.
firms and could reduce the number of counterparties available to U.S.