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  • Commissioner Jill E. Sommers, Dissenting Statement on Final Exemptive Order Regarding Compliance with Certain Swap Regulations

    December 20, 2012

    Although I am very supportive of granting temporary relief from certain provisions of the Dodd-Frank Act, I disagree with the approach and am concerned that the Commission continues to insert unnecessary complexities into the cross-border determinations. As I have said a number of times, the Commission has worked for decades to establish relationships with our foreign counterparts based on respect, trust and information sharing, which has resulted in a long and successful history of mutual recognition. All G20 nations have agreed to a comprehensive set of principles for regulating the over-the-counter derivatives markets. Instead of recognizing these commitments and resolving to work towards mutual recognition of comparable regulatory regimes, keeping in mind the core policy objectives of the G20 commitments, the Commission has embarked on a cross-border analysis that I fear is taking us down a path of regulatory detail that is overly burdensome, complicated, and unnecessary.

    Moreover, it is a mistake to require registration and compliance with certain regulations before our final guidance has been issued. Foreign entities will not have the basic information they need to make informed decisions regarding the ultimate obligations of engaging in swaps activities with U.S. persons (the definition of which continues to shift) prior to having to make the decision to register. There is no reason why the Commission could not have issued broader relief until these issues are settled. We have simply chosen not to.

    I have consistently supported harmonization with both foreign and domestic regulators. Over the past few months we have received invaluable input from many global regulators, who have agreed to meet in early 2013 to inform each other on the progress made in finalizing reforms in their respective jurisdictions and to consult on possible transition periods. Future meetings will explore options for addressing conflicts, inconsistencies, and duplicative rules and examine ways in which comparability assessments and appropriate cross-border supervisory and enforcement arrangements may be made. It is my hope that these meetings will lead the Commission to listen to the concerns being raised by regulators around the world and to adopt a more reasonable approach when it finalizes the cross-border guidance.

    Last Updated: December 21, 2012

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