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May 24, 2016

CFTC’s Final Cross-border Margin Rule a Good Step in the Right Direction

Tuesday, May 24, 2016
Contact: Nick Jacobs, 202-618-6430 or

Washington, D.C. – Dennis Kelleher, President and CEO of Better Markets, issued this statement in response to Commodity Futures Trading Commission’s (CFTC) final Cross-border Margin Rule today:

“We commend the CFTC’s commitment to strong cross-border regulation that stops the global derivatives dealers from searching the world for the biggest loopholes for their high-risk trading. As the trillions of dollars in Wall Street bailouts in 2008 proved, the CFTC clearly knows that a race to the global regulatory bottom serves no one but the biggest banks and that outsourcing the protection of American taxpayers to foreign regulations is unacceptable.

“In particular, Chairman Tim Massad’s idea of promoting the use of margin to address the serious problem of banks attempting to evade U.S. rules by making cosmetic changes to their corporate structure, a legal slight-of-hand known as ‘de-guaranteeing,’ is encouraging. The final rule does in fact adequately capture many affiliates whose transactions may have escaped U.S. margin requirements through the Guidance approach – through the inclusion of the special treatment of Foreign Consolidated Subsidiaries.

“However, while margin is the front line defense against the potential contagion and catastrophe posed by our increasingly large and interconnected over-the-counter derivatives market, margin rules alone cannot fix this problem because that still leaves too many high-risk transactions that pose a dangerous threat to U.S. taxpayers outside the reach of U.S. regulators. Therefore, the Commission must address Clearing and Swap Execution Facility mandates because these rules also seem to have inspired wide spread evasion. Finally, as the various global margin regimes begin to be implemented later this year, the CFTC must remain vigilant and ensure that any ‘substituted compliance’ is indeed comparable in not only form and substance, but also in enforcement and over time. Then, and only then, will America’s families, workers, businesses and taxpayers obtain the real, meaningful protection by the swaps cops on the beat at the CFTC that they deserve.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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