“The European Union is urging the U.S. to allow time for international talks before it imposes swaps rules on EU lenders, saying that the current timetable would lead to the banks facing extra costs.
The European Commission wrote to Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, urging him to extend a temporary exemption for overseas banks, which is scheduled to expire on July 12, according to a copy of the letter obtained by Bloomberg News.
The EU wants the exemption to be maintained until “international principles on cross-border swap rules have been agreed by G-20 leaders and implemented in our respective jurisdictions,” according to the letter from Jonathan Faull, the commission’s director general for internal market and services, and Steven Maijoor, chairman of the European Securities and Markets Authority.
An extension is needed to “avoid any possible legal uncertainty and unintended consequences” from overlapping national rules, they wrote. “EU firms would face huge legal and operational uncertainty.”
The international reach of CFTC swap trading requirements has been one of the most controversial elements of the agency’s Dodd-Frank Act rules, prompting opposition from financial companies including Goldman Sachs Group Inc. and Barclays Plc.”
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