Release Number 6802-13

December 20, 2013

CFTC Approves Comparability Determinations for Six Jurisdictions for Substituted Compliance Purposes

Australia, Canada, the European Union, Hong Kong, Japan, and Switzerland are deemed comparable with respect to certain swaps provisions of the Dodd-Frank Act

Washington, DC — The Commodity Futures Trading Commission (Commission) today approved a series of broad comparability determinations that would permit substituted compliance with non-U.S. regulatory regimes as compared to certain swaps provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the Commission’s regulations. Substituted compliance describes the circumstances where the Commission’s general policy would be to permit non-U.S. swap dealers or non-U.S. MSPs whose swaps activities might bring them within the scope of certain Commission regulations, to use compliance with regulations in their home jurisdiction as a substitute for compliance with the relevant Commission regulations. This approach builds on the Commission’s long-standing policy of recognizing comparable regulatory regimes based on international coordination and comity principles with respect to cross-border activities involving futures and options.

The vote was conducted via seriatim, which was approved by three commissioners. The comparability determinations will be published in the Federal Register.

In accordance with the Commission’s general policy and procedural framework described in its Interpretative Guidance and Policy Statement Regarding Compliance with Certain Swap Regulations published on July 26, 2013 (the Cross-Border Guidance), the comparability determinations are part of substituted compliance with respect to Commission regulations applicable to swaps activities outside the U.S.

This approval by the Commission also reflects a collaborative effort with authorities and market participants from each of the six jurisdictions that has registered swap dealers. Working with authorities in Australia, Canada, the European Union (EU), Hong Kong, Japan, and Switzerland, the Commission was able to issue comparability determinations for a broad range of entity-level requirements (see related attached summary chart). In two jurisdictions, the EU and Japan, the Commission also approved substituted compliance for a number of key transaction-level requirements. For the EU, the Commission is issuing comparability determinations for transaction-level requirements under Commission regulations 23.501, 23.502, 23.503, and certain provisions of 23.202 and 23.504. For Japan, the Commission is issuing comparability determinations for transaction-level requirements under certain provisions of Commission regulations 23.202 and 23.504.

As jurisdictions outside the U.S. continue to strengthen their regulatory regimes, the Commission may determine that additional foreign regulatory requirements are comparable to and as comprehensive as certain requirements under the CEA and the Commission’s regulations.



Last Updated: December 20, 2013