CMC Attends CFTC-SEC International Issues Roundtable

CMC attended a joint roundtable organized by the CFTC and SEC on international regulatory issues pertaining to the Dodd-Frank Act. Topics discussed were cross-border transactions, global entities, and market infrastructure. Participating panelists represented US and foreign banks, end-users, exchanges and interest groups.

Several panelists stressed on the importance of getting the legal definition of “US person” appropriately and accurately nailed down. Many discussed the need for clarity in understanding whether their entities would be subject to US regulations, foreign regulations or both.

CFTC officials and some interest groups stated that it wasn’t possible for the US to wait for all other geographic jurisdictions to complete their rulemaking processes before publishing the final rules that would apply in the U.S because doing that would be tantamount to taking almost no regulatory action. The SEC asked panelists to clarify the differences between duplicative rules and rules that are in direct conflict with foreign regulators.

There was considerable debate about the wisdom of rulemaking applying at an entity level versus at a transaction level. The scope of the end-user exemption in various geographies was discussed. Panelists representing several exchanges said that interoperability should not be mandated.

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