SEC Plan Gives Exemptions to Swap Dealers’ Overseas Branches

U.S. regulators face pressure to limit the international reach of swaps rules.

JPMorgan Chase & Co., Goldman Sachs Group Inc. and other U.S. swap dealers would gain limits on the Dodd-Frank Act’s reach for overseas trades under a Securities and Exchange Commission proposal released today.

SEC commissioners voted 5-0 to seek comment on measures that would exempt overseas affiliates, including those guaranteed by U.S. banks, from registration when they conduct business predominantly with foreign clients. Overseas branches of U.S. banks could be exempt from Dodd-Frank standards for conduct with clients for equity and some credit swaps.

Prescribed Changes

The cross-border rules is the SEC’s first major proposal under White, who took over as chairman on April 10. White told lawmakers during her Senate nomination hearing in March that she would prioritize rules required by Dodd-Frank, which prescribed changes to reduce the risk of repeating the 2008 crisis fueled by unregulated swaps that forced the U.S. to bail out American International Group Inc.

July Deadline

Barclays Plc, UBS AG, Credit Suisse Group AG and other overseas-based dealers began registering with U.S. regulators at the end of last year. CFTC Chairman Gary Gensler said his agency shouldn’t extend a July 12 deadline for other rules to take effect.

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