The Commission recognizes that markets are global as the result of electronic access, linkages, mergers, and cooperative business arrangements. The CFTC historically has supported programs that facilitate cross-border access to markets and products, such as the Commission’s recognition program for intermediaries and its registration category for foreign boards of trade. Both of these programs are based on recognition of foreign home country regulators that comparably and comprehensively provide oversight, allowing the CFTC to rely on this foreign regulation. These programs reflect the understanding that no one regulator alone will have all of the information or authority to supervise global business.
Effective regulation of such markets therefore requires international coordination, and necessitates that the Commission cooperate with foreign market authorities to supervise U.S. markets and protect U.S. customers. Additionally, the Commission works closely with its regulatory counterparts abroad, as well as with relevant international organizations, to promote high-quality derivatives regulation worldwide and convergence where possible. 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 Dodd-Frank Act increases the need for international outreach. Section 752 of that Act states that the Commission “shall consult and coordinate” with foreign authorities to establish “consistent international standards” regarding regulation of swaps. Many of the new entities subject to regulation under the Dodd-Frank Act are located abroad and the Commission will closely coordinate with foreign regulators in order to supervise these global entities.