Public Statements & Remarks

Statement of Commissioner J. Christopher Giancarlo on the Proposed Rule on Cross-Border Application of the Registration Thresholds and External Business Conduct Standards Applicable to Swap Dealers and Major Swap Participants

    October 11, 2016

I support issuing today’s proposed rule in order to hear commenters’ considered views, especially with respect to the Commission’s approach on the issue of U.S. personnel arranging, negotiating or executing transactions for two non-U.S. persons.

I have been a critic of the Commission’s 2013 over-expansive cross-border interpretative guidance1 and its avoidance of the rulemaking process to implement the sweeping policies contained therein. I consider both of these failings as having been compounded by the Division of Swap Dealer and Intermediary Oversight (DSIO) Advisory No. 13-692 stating that CFTC transaction-level requirements apply to swaps between a non-U.S. swap dealer and a non-U.S. person if the swap is arranged, negotiated or executed by personnel or agents of the non-U.S. swap dealer located in the U.S. (ANE Transactions). Today the Commission is proposing a rulemaking on the cross-border application of the registration thresholds and external business conduct standards to swap dealers and major swap participants and the ANE Transactions in DSIO Advisory No. 13-69. I commend the Commission for at last putting the guidance and advisory through the formal rulemaking process.

The proposed rule provides that these ANE Transactions fall within the scope of the Dodd-Frank Act and that it may be appropriate to apply specific swap requirements to such transactions to advance Dodd-Frank’s regulatory objectives. Yet, it also preliminarily determines that applying registration thresholds and external business conduct standards to such ANE Transactions would not further Dodd-Frank’s regulatory objectives, except for certain abusive practices and fair dealing rules with respect to external business conduct standards. While this limited application seems appropriate, I am interested to hear commenters’ thoughts about the Commission’s approach and rationale before reaching a decision.

Since this proposal only addresses registration thresholds and external business conduct standards, the Commission says it intends to address the application of other Dodd-Frank swap requirements to ANE Transactions in subsequent rulemakings as necessary and appropriate. Until that happens, I urge the staff to commit to extend no-action letter 16-643 in order to provide clarity that those swap requirements do not apply to ANE Transactions. This will provide the marketplace with certainty that all the swap requirements not addressed in today’s rulemaking will not apply to ANE Transactions until the Commission takes further action.

1 Interpretive Guidance and Policy Statement Regarding Compliance With Certain Swap Regulations, 78 Fed. Reg. 45292 (Jul. 26, 2013),

2 CFTC Staff Advisory No. 13-69 (Nov. 14, 2013),

3 CFTC Letter No. 16-64 (Aug. 4, 2016),

Last Updated: October 11, 2016