[Editor’s Note: The following post is authored by Davis Polk & Wardwell LLP]
On July 12, 2013, the Commodity Futures Trading Commission (“CFTC”) adopted final cross-border guidance (the “Final Guidance”) that provides guidelines for the application of the CFTC’s swap regulatory regime to cross-border swap activities. At the same time, the CFTC adopted a phase-in compliance schedule (the “Exemptive Order”) that extends, with material changes, the cross-border exemptive order issued by the CFTC in January 2013.
The Final Guidance and the Exemptive Order address several topics, including: (1) the final definition of U.S. person for purposes of the CFTC’s swap regulatory regime; (2) guidance on which swaps a non-U.S. person must include in, and can exclude from, its swap dealer de minimis and major swap participant (“MSP”) threshold calculations; (3) guidance on the types of offices the CFTC would consider to be a “foreign branch” of a U.S. swap dealer or MSP and the circumstances in which a swap transaction would be considered to be “with” such a foreign branch; (4) guidance on how swap-related requirements will be applied to cross-border swap transactions and when substituted compliance would be available if the CFTC determines that a foreign jurisdiction’s rules are comparable to its own; and (5) phased-in compliance periods for many of the swap regulatory regime’s requirements. For more information, see the July 3, 2012 Davis Polk Client Memorandum, CFTC Finalizes Cross-Border Swaps Guidance and Establishes Compliance Schedule.
Comments on the Exemptive Order are due on August 21, 2013.
The full Davis Polk Client Advisory includes recent update on the following topics:
SEC Rules and Regulations
- SEC Grants No-Action Relief to Allow Registered Investment Companies to Maintain Assets with
- CME to Meet Margin Requirements for Additional Swaps Cleared by CME
- SEC Extends Immediate Effectiveness of Post-Effective Amendments to Additional Closed End Funds
Industry Update
- CFTC Adopts Final Guidance on Cross-Border Swaps and Compliance Schedule
- SEC’s Division of Investment Management Answers Questions Concerning Form 13F
Litigation
- Department of Justice Indicts Hedge Fund Advisers and SEC Charges Advisers’ Founder
- CFTC Brings First “Spoofing” Case Against High-Frequency Trading Firm