Statement of Dissent to the CFTC-SEC Report on International Swap Regulation Pursuant to Section 719(c) of the Dodd-Frank Act (Report)

Dissenting Statement of Commissioner O'Malia

CFTC Commissioner O'Malia it complains that the CFTC/SEC Joint Report on International Swap Regulation fails to properly capture the entirety of the regulatory landscape and the challenges in harmonizing our rules. O'Malia argues that significant questions remain regarding the extraterritorial application of the specific rulemakings currently underway at the Commissions. Further, significant questions remain regarding the pace of rulemakings among the various regulatory bodies going forward.

O'Malia also complains that neither the CFTC nor the SEC has disclosed the extraterritorial application of our proposed or final rules creating regulatory uncertainty for global market participants. "Under both the proposed and final rules it appears that U.S. rulemakings would apply to entities and activities in foreign jurisdictions. For example, the application of the proposed rule regarding the CFTC's entity definitions would make U.S. financial and non-financial entities subject to mandatory clearing and capital requirements, even if they operate outside the U.S., while foreign competitors may not be so constrained."

Cross References: Dodd-Frank Sections 719(c), 728(d), 752(a).