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December 18, 2013

CFTC Is Poised to Expand Its Reach Overseas

The Commodity Futures Trading Commission is moving to force overseas financial firms to comply with certain U.S. rules, according to an official familiar with the process, a move likely to stoke criticism the U.S. is bidding to become the de facto global financial regulator.

The CFTC is preparing to say that multiple rules developed by the European Union and five other jurisdictions governing so-called swaps aren’t strict enough, clearing the way for the CFTC to impose its regulations on much of the $693 trillion global swaps market, the official said.

The U.S. agency had given overseas regulators time to write their own rules governing swaps, a type of financial product at the heart of the 2008 financial crisis that allows firms and their clients to hedge against risks or bet on an asset’s value.

Yet the CFTC is now set to declare many of those efforts insufficient, including rules governing how firms report swaps to a data repository. CFTC staff are still finalizing their recommendations, and they could change before the full agency is expected to vote on them this week, according to people familiar with the matter.”

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Read full Wall Street Journal article here

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