Divisions
International Affairs

The Office of International Affairs (OIA) advises the Commission regarding interna­tional regulatory initiatives; provides guidance regarding international issues raised in Commission matters; represents the Commission in interna­tional organizations, such as the International Organization of Securities Commissions (IOSCO); coordinates Commission policy as it relates to policies and initiatives of major foreign jurisdictions, the G20, Financial Stability Board and the U.S. Treasury Department; and provides technical assistance to foreign market authorities.

The implementation of comprehensive regulations under the Dodd-Frank legislation marks a new era in the swaps marketplace by mandating, among other things, the regulation of swap dealers, clearing of swaps and transparency with respect to those transactions.   However, regulation in the United States alone will not be sufficient to protect the financial system. Because the swaps market is conducted on a global basis, it is possible for swaps executed offshore by U.S. financial institutions to transmit the risk of those transactions back to the United States.  Recognizing this risk, the United States joined with other G20 leaders in 2009 to require that all major market jurisdictions bring swaps under regulation.   Since that date, the Commission has been engaged in an unprecedented outreach to major market jurisdictions and expanded involvement in numerous international working groups to encourage the adoption of robust swaps regulation.

Once the new swaps regulations are fully 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 contemplates 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.

This added emphasis on swaps regulation is in addition to the Commission's long-standing bilateral engagement with foreign regulators to establish customer and market protection arrangements in futures trading. It is also in addition to the Commission's strong role in international standard setting organizations such as the International Organization of Securities Commissions (IOSCO), which recently recognized the Commission's long history of contributions by voting to make the Commission a full member.

In this regard, the aftermath of the 2008 financial crisis continues to prompt the formation of numerous initiatives in IOSCO as well as other forums, to focus on areas 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, and volatility in commodity futures markets.  The Commission's leadership was recognized by its appointment as co-chair of two important IOSCO work-groups – a permanent committee on commodity derivatives markets, which produced a report on principles for price reporting agencies in oil, and  an IOSCO Board level Task Force on benchmarks.

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.

Finally, the CFTC also provides technical assistance to emerging and recently-emerged markets to help these jurisdictions in establishing and implementing laws and regulations that foster global market integrity.  The Commission's international training symposium has consistently attracted wide attendance by foreign regulators who look to the Commission as a global standard setter in derivatives regulation.

FY 2014 Budget Overview by Mission Activity

Breakout of International Affairs Request by Mission Activity
Dollars in Thousands
  FTE Salaries and Expenses IT Total
International Policy Coordination 17 $4,050 $0 $4,050
Total 17 $4,050 $0 $4,050

Top FY 2012 Accomplishments

Coordinated Dodd-Frank Outreach. The Commission's international staff coordinated the  Commission's engagement with the European Commission and Parliament with the objective of encouraging harmonization of European regulatory development with Dodd-Frank policies. The Commission initiated similar discussions with other foreign regulators. Additionally, OIA organized a roundtable on the cross-border application of Dodd-Frank.

Participated in International OTC derivatives Policy Development. The CFTC continued its engagement in technical level working groups on OTC derivatives with global regulatory authorities, such as the European Commission, European Securities Markets Authority (ESMA), and regulatory authorities in Australia, Canada, Japan, Singapore, and Hong Kong. Commission staff participated in the OTC Derivatives Regulators Forum (ODRF), which has created new subgroups for FX and Commodity Derivatives repositories. The Commission also participated in the FSB OTC derivatives working group, which is monitoring progress by countries in implementing the G20's OTC derivatives mandates and the FSB legal identifier task force.  The Commission, as co-chair of an IOSCO-CPSS task force on OTC derivatives regulation, authored a report on data reporting and aggregation requirements.

Participated in Internal Dodd-Frank Policy Development.  The Commission's international staff participated in Dodd-Frank rulemakings in order to provide input on the cross-border implications of those rulemakings, continued to coordinate a review of cross-border arrange­ments that will be needed under Dodd-Frank with major market jurisdictions such as the EU, and devel­oped draft Memoranda of Understanding (MOU) on the supervision of dually-regulated cross-border clear­inghouses.  The Commission led a joint CFTC-SEC study on swap and clearing regulation in the U.S., Asia and Europe.

Developed Policy Within the IOSCO Board. The Commission successfully advocated for the CFTC to be considered as an Ordinary member with full voting rights, thus ending decades of being considered an Associate member.  This will allow the Commission to have a greater voice in shaping international policies within IOSCO.  Commission staff continued to participate actively in the various IOSCO working groups Standing Committee 2 on secondary markets, Standing Committee 3 on intermediaries, the OTC derivatives task force, and the newly established Assessment Committee.  Commission staff is participating in a working group to issue a report regarding effective and practical access by regulators and other official international authorities to trade repository data.

The Commission also co-chaired the IOSCO committee on commodity futures markets and in that capacity took a leading role in developing a final report that established principles for price reporting agencies in oil.  This report was requested by IOSCO and the G-20 as a means to enhance transparency in global oil markets.  In its role as co-chair, the Commission also co-chaired an international study on the extent of derivatives regulators' implementation of the IOSCO principles for commodity derivatives markets.

The commission also co-chairs, with the UK FSA, an IOSCO Board special Task Force on benchmarks, which will examine the need for better regulation of benchmarks used in financial markets.

Represented the Commission in U.S. Treasury-led Dialogues. The Commission participatedin several bilateral meeting with European Financial regulators led by the US Treasury to discuss, among other things, the EU Data protection Directive, crisis management, Basel II and III, the Volcker rule and OTC derivatives, a China Strategic and Economic dialogues with China and India,  dialogues under NAFTA, and  Treasury-led dialogues with the European Commission. Participated in a G-20 study groups on commodities and on fossil fuel volatility.

Provided Technical Assistance.  The Commission met its performance target of training at least 60 non-U.S. regulators in FY 2012 primarily through the annual symposium for foreign regulators organized by the Commission. Additionally, Commission staff provided technical assistance training to authorities in Brazil and Jamaica.   The Commission also coordinated the annual international regulatory conference at Boca Raton, Florida.

Top FY 2013 President's Budget & Performance Planned Outcomes

Outreach to Harmonize International OTC Polices.  OIA will work with leaders of authorities with responsibility for the regulation of the OTC derivatives markets in major market jurisdictions to support the adoption and enforcement of robust and consistent standards in and across jurisdictions and to develop concrete and practical solutions to conflicting application of rules, identify inconsistent or duplicative requirements and attempt to reduce the regulatory burdens associated with such requirements and identify gaps and recue the potential for regulatory arbitrage.

OIA also will continue to work with staff at the European Commission, in order to encourage harmonization of European Union law to the level of the Commission's Dodd-Frank rulemakings, to resolve policy differences, and avoid gaps that could lead to regulatory arbitrage.  OIA will continue to coordinate meetings between the Chairman and European Commission and European Union authorities.  OIA will engage with other foreign regulators (e.g., Canada, Japan, and Singapore) for similar purposes.

Coordinate Supervision of Global Entities with Foreign Authorities.  Work with foreign authorities, including  the European Commission,  European Securities Market Authority, and other foreign regulators to coordinate policies and to develop memorandum of understanding and other cooperative arrangements that will be needed to implement final Commission Dodd-Frank rules (e.g., with regard to SDRs).

Develop Internal Policy on the International Application of the Dodd-Frank Act.  Work with an internal team to determine when and how to apply the Dodd-Frank Act to "activities that have a direct and significant effect" on U.S. Commerce pursuant to Section 722(d) of the Dodd-Frank Act.

IOSCO Representation.  Continue to participate in IOSCO's Board, co-chair the permanent committee on commodity futures markets and the Board Task Force on benchmarks.   OIA will continue to participate in IOSCO standing committee 2 on secondary markets, 3 on intermediaries, the Assessment Committee and over-the-counter derivatives task force.  All of these activities relate collectively to the development of standards of best practices and guidance in securities and derivatives regulation.

Respond to Global Concerns in Energy and Agricultural Futures Markets.  Participate in U.S. Treasury and NSC coordinating groups, various G20 energy and commodity experts groups and co-chair the IOSCO committee on commodity futures markets, to address matters of concern in energy and agricultural commodity futures markets and develop supervisory standards for commodity futures markets.

U.S. Treasury and other Initiatives.  Coordinate CFTC participation in U.S. Treasury financial dialogues, financial stability Board projects and other multilateral initiatives (e.g., within the North American Free Trade Agreement and the International Monetary Fund).

Technical Assistance.  OIA will continue to plan and coordinate: The Commission's annual trading seminar for foreign market authorities; the Commission's annual hosting of an international conference for foreign regulators in Boca Raton, Florida;  visits to the Commission requested  by foreign regulators to the Commission; and on-site technical assistance to foreign market authorities, on a staff-available basis.

Top FY 2014 President's Budget & Performance Planned Outcomes

Outreach to Harmonize International OTC Polices.  OIA will work with leaders of authorities with responsibility for the regulation of the OTC derivatives markets in major market jurisdictions to support the adoption and enforcement of robust and consistent standards in and across jurisdictions and to develop concrete and practical solutions to conflicting application of rules, identify inconsistent or duplicative requirements and attempt to reduce the regulatory burdens associated with such requirements and identify gaps and recue the potential for regulatory arbitrage.

OIA also will continue to work with staff at the European Commission, in order to encourage harmonization of European Union law to the level of the Commission's Dodd-Frank rulemakings, to resolve policy differences, and avoid gaps that could lead to regulatory arbitrage.  OIA will continue to coordinate meetings between the Chairman and European Commission and European Union authorities.  OIA will engage with other foreign regulators (e.g.,Canada, Japan, and Singapore) for similar purposes.

Coordinate Supervision of Global Entities with Foreign Authorities.  Work with foreign authorities, including  the European Commission,  European Securities Market Authority, and other foreign regulators to coordinate policies and to develop memorandum of understanding and other cooperative arrangements that will be needed to implement final Commission Dodd-Frank rules (e.g.,  with regard to SDRs).

Develop Internal Policy on the International Application of the Dodd-Frank Act.  Work with an internal team to determine when and how to apply the Dodd-Frank Act to "activities that have a direct and significant effect" on U.S. Commerce pursuant to Section 722(d) of the Dodd-Frank Act.

IOSCO Representation. Continue to participate in IOSCO's Board, and co-chair the permanent committee on commodity futures markets and Board Task Force on benchmarks. OIA will continue to participate in IOSCO committee 2 on secondary markets, 3 on intermediaries, the assessment committee  and over-the-counter derivatives task force.  All of these activities relate collectively to the development of standards of best practices and guidance in securities and derivatives regulation.
 
Respond to Global Concerns in Energy and Agricultural Futures Markets.  Participate in U.S. Treasury and NSC coordinating groups, various G20 energy and commodity experts groups and co-chair the IOSCO committee on commodity futures markets, to address matters of concern in energy and agricultural commodity futures markets and develop supervisory standards for commodity futures markets.

U.S. Treasury and Other Initiatives.  Coordinate CFTC participation in U.S. Treasury financial dialogues, financial stability Board projects and other multilateral initiatives, such as the North American Free Trade Agreement and International Monetary Fund.

Technical Assistance.  OIA will continue to plan and coordinate: The Commission's annual trading seminar for foreign market authorities; the Commission's annual hosting of an international conference for foreign regulators in Boca Raton, Florida;  visits to the Commission requested  by foreign regulators to the Commission; and on-site technical assistance to foreign market authorities, on a staff-available basis.