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CFTC considers waiving swaps rules agreements for foreign regulators

Gary Gensler

The CFTC proposed waiving a provision on Tuesday that requires overseas regulators to sign Dodd-Frank-mandated agreements that would force them to assume lawsuit-cost liability arising from the sharing of U.S. swaps data.

“The Commission is working closely with international regulators on a collaborative approach regarding how data may be accessed by regulators,’ CFTC Chairman Gary Gensler said, according to Reuters.

Waiving the rule may allow foreign regulators to access U.S. swaps data more easily, and the CFTC, in explaining the proposal, cited “traditions of mutual trust and cooperation among international regulators.” The CFTC exemption would apply only to those overseas regulators that require swaps repositories to register with and report data to officials, Reuters reports.

Some international regulators said that the data-sharing agreements hinder the ability of foreign markets to monitor counter-party risk in the global economy.

CFTC Commissioner Jill Sommers expressed approval of the rule easement but said that a “legislative fix” is the only solution that would allow both foreign and domestic parties timely data access.

“The Commission should publicly support repeal of the indemnification provisions,” Sommers said, according to Reuters.

Global lawmakers are in the process of finalizing rules that would increase transparency in the swaps market following swaps-related market damage that contributed to the 2008 financial crisis.

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