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.
"I question the wisdom of spending commission resources to chase after a foreign swap transaction that has nothing to do with the United States," O'Malia said today in prepared remarks for a Futures Industry Association conference in Singapore.
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