“Three industry groups filed a lawsuit on Wednesday against the Commodity Futures Trading Commission challenging the agency’s controversial, cross-border swaps rules, which are part of a broad effort to reform the derivatives market.
“The Securities Industry and Financial Markets Association, the International Swaps and Derivatives Association and the Institute of International Bankers accused the CFTC of “unlawfully circumventing” procedures, failing to conduct legally required cost benefit analysis and imposing rules that are contrary to international co-operation.
“European regulators have also opposed the CFTC’s cross border derivatives rules, saying the agency has over-reached by requiring foreign market participants to follow the US rule book if they trade with a US counterparty. Critics say that could force about half of London’s derivatives market to operate under US rules.
“Sifma and ISDA have successfully sued the CFTC once before. Last September, a US judge threw out a CFTC rule curbing speculation by traders in certain commodities, saying the agency did not show why it was necessary. The CFTC approved a new version of the rule last month.”
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