‘Insanity’ in U.S. Overseas Swaps Policy

CFTC commissioner cites legal and enforcement issues surrounding agency's regulation of swaps trades performed by U.S.-based firms for overseas affiliates.

A Commodity Futures Trading Commission (CFTC) policy extending the Dodd-Frank Act’s reach to more overseas swap trades raises “problematic” legal issues, one of the agency’s commissioners said.

Scott O’Malia, a Republican, criticized recent staff opinions on the agency’s oversight of foreign derivatives deals as “regulatory insanity.” The CFTC told banks last month that it would impose Dodd-Frank rules when they arrange trades domestically and then book them overseas.

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