IIB Files Comments on CFTC Cross-Border Exemptive Order (with Lofchie Comment)

The IIB has submitted a comment letter to the CFTC regarding the July cross-border Exemptive Order and the Interpretive Guidance and Policy Statement.The letter seeks transitional relief beyond that contained in the order, identifying four key areas that transitional relief was not provided under the Exemptive Order, but for which the IIB sees relief as necessary: (i) the bona fide "foreign branch" test, (ii) guidance regarding U.S. branches of non-U.S. swap dealers and MSPs, (iii) large trader reporting, and (iv) the application of legal entity identifier recordkeeping requirements to certain non-U.S. swap dealers and MSPs.

The IIB also seeks clarification with respect to "the prospective nature of the Final Guidance," requesting confirmation regarding: (i) the application of the new "U.S. person" definition to existing funds, and (ii) changes to the MSP threshold calculations.

Lofchie Comment: IIB's request for delay and clarification illustrates why it was inappropriate for the CFTC to issue the Final Guidance without going through an ordinary administrative rulemaking process where ambiguities in the guidance that is supposedly not a rule could have been addressed.

See:IIB Comment Letter. See also: Industry Groups Submit Critical Comments on CFTC Cross-Border Guidance (with Lofchie Comment) (August 13, 2013); CFTC Exemptive Order for Certain Swap Regulations (Fed. Reg. Version) (July 22, 2013); Delta Strategy Group Summary: Final CFTC Cross-Border Guidance and Accompanying Exemptive Order (July 19, 2013); and CFTC Approves Cross-Border Guidance and Exemptive Order (with Lofchie Comment) (July 12, 2013).