Market Participants - Comments on ET Guidance
Bank of America Corporation, et al.: Bank of America Corporation, Citigroup Inc., and JPMorgan Chase Co. submitted a modified comment letter addressing several compelling issues which they believe are highly relevant to the cross-border application of Dodd-Frank.
Bank of America, et al.: Bank of America Merrill Lynch, Barclays Capital, PNB Paribas, Citi, Credit Agricole Corporate and Investment Bank, Credit Suisse (USA), Deutsche Bank AG, HSBC, Morgan Stanley, Standard Chartered Bank, UBS AG, and Wells Fargo Company submitted a joint comment letter to the CFTC outlining several concerns about the Proposed Order. While the banks believe that the Proposed Order would accomplish many goals, it would not fully achieve the objective of ensuring an orderly transition to Dodd-Frank's regulatory framework, or providing greater legal certainty to market participants with respect to U.S. regulation of their cross-border activities.
Barclays: Barclays urged the CFTC to provide sufficient time for the market to make adjustments and come into compliance once the Proposed Guidance is finalized.
FMS Wertmanagement (FMS-WM): FMS-WM argued that the use of Swaps (as defined under the Dodd-Frank Act) should not be subject to the regulatory scheme instituted by the Act. Accordingly, FMS-WM respectfully requested that the Commission clarify in the final interpretive guidance that FMS-WM be treated as a foreign government for purposes of the registration requirements, and that it not be subject to the requirements otherwise applicable to major swap participants, including registration and clearing requirements.
J.P. Morgan: JPMorgan discussed concerns with (i) the form of the proposed clarifications (as guidance rather than a formal rule); (ii) the substance of the proposals (which it believes will create an uneven regulatory playing field to the detriment of U.S. financial institutions); (iii) the process for clarifying the extraterritorial reach of these regulations (which will leave market participants, whether inside or outside the U.S., with the challenge of implementing a compliance program of uncertain scope); and (iv) the lack of coordination of the proposals with other U.S. regulators, as well as comparable regulators in Europe and other relevant jurisdictions.
Lloyds Banking Group: Lloyds Banking Group noted that the proposed cross-border interpretive guidance is not proportionate and might thus potentially bring non-systemic activity into the purview of U.S. Agencies. The Group also noted that the number of regulatory proposals from a range of jurisdictions present a significant complexity risk for both the industry and supervisors.
SociÉtÉGÉneralÉ(SG): SG suggested certain modifications to the Proposals on the Cross-Border Application of Certain Swaps Provisions of the CEA and Notice of Proposed Exemptive Order.
UBS: UBS Group General Counsel, Markus Diethelm, discussed three principal concerns as a swap dealer. These included the concern that, without guidance from CFTC on the cross-border application of swap dealer requirements, UBS AG will not know the extent to which it may need to reorganize its swap activities or operations in order to comply with multiple sets of laws.
Additional Letters: Available here.
Cross-Reference(s): Dodd-Frank Act Title VII.
View Release in full here (links externally to CFTC website).