New York financial firms would move jobs overseas if the U.S. grants the industry's request to exempt companies' foreign branches from some Dodd-Frank Act rules, said Gary Gensler, chairman of the Commodity Futures Trading Commission.
“If we accept their approach — that they say, 'No, don't cover their London branches' — the jobs will go overseas, but the risk will be back here,” Gensler said today in an interview on Bloomberg Television.
JPMorgan Chase & Co. and Goldman Sachs Group Inc. are among U.S. firms to argue that applying Dodd-Frank rules to their overseas branches or subsidiaries would threaten their ability to compete with foreign-based rivals. Imposing the law's margin requirements on non-U.S. swaps would “eviscerate our ability to serve clients overseas and cede the global market,” JPMorgan Associate General Counsel Don Thompson said at a House hearing Feb. 8.
The CFTC is set to propose guidance on June 21 on how the U.S. may govern the international reach of Dodd-Frank rules on derivatives, people familiar with the plan have said.
The CFTC also is planning an order providing overseas-based swap dealers and some affiliates of U.S. banks as much as a year to comply with all of Dodd-Frank regulations, Gensler said in a speech prepared for an Institute of International Bankers' conference in New York. The delay may affect compliance with capital and some risk management regulations, Gensler said.
Overseas Compliance
Overseas swap dealers would still be required to register with the CFTC and report trades to swap data repositories, Gensler said. The CFTC is seeking to have a system for allowing compliance with overseas regulations substitute for Dodd-Frank rules.
Regulators are also seeking to complete rules this year for exchange trading.
“We need to bring the same transparency to the swaps market that has existed for decades in the securities and futures market,” Gensler said in the interview today. “That means that end users can see the bids and the offers, and it broadens competition.”
Bloomberg News
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
