The Swiss Financial Market Supervisory Authority recently said in a letter to Commodity Futures Trading Commission Chairman Gary Gensler that the registration of UBS AG and Credit Suisse Group AG with the CFTC may be irreconcilable with Swiss requirements.
The Swiss Financial Market Supervisory Authority, known as Finma, said that it had “serious doubts” regarding the international impact of Dodd-Frank’s registration requirements, adding that those requirements may interfere with Swiss data and privacy laws, Bloomberg reports.
“If such margin requirements are applied to a Swiss-based entity, this may duplicate the requirements and may possibly conflict with international and domestic capital adequacy rules,” Finma CEO Patrick Raaflaub and Mark Branson, the head of banks at Finma, said in the letter, according to Bloomberg.
Beginning in September, banks that are involved in swaps may be required to register with the CFTC. The letter said that registration may be “particularly challenging” for UBS, which carries out swaps through a branch network rather than foreign subsidiaries, Bloomberg reports.
UBS plans to reassign its derivatives division to a separate entity, UBS London, a process that is expected to take several years.
Raaflaub and Branson expressed confidence in the abilities of Finma and the CFTC to find alternatives, adding that the registration of a U.S.-based information transfer agent could be a possible solution.