Financial Industry Testimony on Implementation of Dodd-Frank

Samara Cohen, the Managing Director in the Securities Division of Goldman, Sachs Co., gave her views on the House of Financial Services Committee's ongoing implementation of the Dodd-Frank Act, especially on extraterritoriality concerns with respect to Title VII regulation and implementation. In her introductory remarks, she said:

[The CFTC's current] guidance fails to provide a clear implementation sequencing scheme that accords with the work being done to implement the G-20 commitments by regulators and legislators in other jurisdictions. These problems will discourage customers from transacting with U.S. financial institutions and further move that business offshore, decrease efficiency in the swap market and increase systemic risk. A long-term solution is only possible through the CFTC avoiding assertions of jurisdiction beyond what is contemplated under Dodd-Frank, as well as close coordination on both timing and substance with the SEC and regulators in other G-20 jurisdictions.

The four principal problems identified by Ms. Cohen in her remarks are (i) the unprecedented scope of asserted jurisdiction by the CFTC; (ii) the very broad definition of "U.S. person"; (iii) the absence of sequencing of rules by the CFTC combined with the lack of clarity as to whom the rules apply; and (iv) the limited co-ordination that the CFTC has undertaken with other regulators or the SEC.

View testimony in full here (links externally to Financial Services website).