The Commission’s international policy coordination activities take place primarily within IOSCO and within U.S. Treasury and G-20 working groups. The aftermath of the financial crisis has prompted the formation of numerous initiatives in all of these forums, such as: cooperation and coordination in the areas of swaps regulation, central counterparty clearing standards, the monitoring and control of systemic risk, the protection of customer funds, and mechanisms to share systemically important information internationally. International concerns regarding volatility in commodity futures markets resulted in the formation of an IOSCO Task Force on Commodity Futures Markets, which is co-chaired by the Commission’s international staff. Participation in these work-streams is critical because the work-product is often transformed into international standards of best practice, which are then subject to compliance assessment by the International Monetary Fund in its Financial Sector Assessment program. The Commission’s participation historically has focused on incorporating the Commission’s (and hence, the U.S.’s) regulatory approach into these internationals standards, encouraging international harmonization.
The Commission’s international agenda also includes responding to requests by the U.S. Treasury to participate in international dialogues (e.g., U.S.— China dialogue), participating in National Security Council organized discussions to coordinate U.S. Government commodity policy, providing technical assistance to developing market jurisdictions, and engaging in bilateral negotiations with foreign regulators to resolve cross-border issues that affect the competitiveness of the U.S. futures industry. The Commission’s current work is supported by 10 FTE.
The adoption of DFA legislation and the ongoing development of implementing rules by the Commission have significantly increased demands on international staffing. For example, the Commission’s international staff has engaged in an unprecedented outreach to European regulatory authorities, most notably the European Commission. This effort has focused on encouraging foreign regulatory authorities to adopt rules that are harmonized with the Commission’s DFA approach. International staff also is participating in cooperation with the SEC in the DFA mandated study on the approaches to over-the-counter derivatives swap regulation and the regulation of over-the-counter clearing in major jurisdictions.
Once the new DFA regulations are in effect, international staff will be required to develop supervisory coordination arrangements with foreign authorities in major jurisdictions where regulated entities will reside, such as the European Union, Canada, and Japan. Focusing solely on the EU, the Commission contemplate the need to engage not only the European Commission, but also the European Securities and Markets Authority and relevant national regulators, such as the U.K. FSA, French AMF and German BAFIN, to negotiate coordinating supervisory arrangements for entities that likely will be subject to regulation in both the EU and the United States. Likewise, the Commission anticipates that similar arrangement will be needed in major market jurisdictions such as Australia, Canada and Japan.
Finally, IOSCO recently converted the Task Force on Commodity Futures Markets into a permanent standing committee, which will require stable, long-term staffing if the Commission is to retain its leadership role as co-chair of that standing committee.
In order to adequately staff the existing work-streams and accommodate the growing demands of DFA rules, the Commission requests six additional FTE. (6 FTE, $1.470 million)
Organizationally, the Commission’s examinations-related increases will support the Commission-wide requirements through one program area: