House Republicans' Letter to Treasury Secretary Geithner: Digs at the CFTC, Among Others

Four senior House Republicans sent a joint letter to Treasury Secretary Geithner in which they urged that the Secretary, in his role as Chairman of the Financial Stability Oversight Council ("FSOC"), cause the CFTC to delay the effectiveness of its swap rules past October 12. In the letter, the Representatives criticize the CFTC for failing to coordinate either with non-US regulators or with the SEC. The failure to coordinate with non-US regulators will be to the long-term detriment of US firms (in the view of the Representatives). In addition, the Representative say that the CFTC's failure to coordinate with the SEC will result in swaps and security-based swaps being subject to fundamentally different schemes of regulation.

The letter also criticizes Secretary Geithner for failing to provide a timely definition of the FX trades that constitute swaps. This letter differs from the recent similar letter from Representative Frank, who also urged Secretary Geithner to act on the definition, in that Representative Frank expressed no view on the decision that the Secretary should make, whereas this letter urges the Secretary to exempt at least some FX trades from the definition.

Click here to view House Republicans letter. See also: news itemwith link to the letter of Representative Frank.