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March 25, 2024

The CFTC Must Not Outsource the Protection of US Taxpayers to Deficient UK Regulations and Failed Regulators

WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President, and CEO, issued the following statement in connection with the filing of a comment letter with the Commodity Futures Trading Commission (CFTC) in response to a request for a comparability determination by swap dealers in the United Kingdom:

“The importance of the CFTC’s responsibility and duty to undertake robust comparability determinations cannot be overstated. These determinations de facto outsource the protection of U.S. taxpayers, its financial system, and its economy to foreign governments, laws, regulations, regulators, and supervisors. Given that many of those foreign officials failed miserably and repeatedly in the past to protect their own taxpayers, citizens, financial systems, and economies – to catastrophic effect in 2008 – the stakes for the U.S. in such determinations are extremely high.

“Here, the largest, most dangerous too-big-too-fail U.S. banks want the CFTC to allow their swap dealers in the United Kingdom (UK) to follow UK regulations and be policed by UK regulators rather than U.S. regulations and regulators. To stop U.S. financial firms from evading U.S. laws that protect Americans against financial crashes and bailouts, the CFTC is only lawfully allowed to do this if the UK’s laws and regulations are comparable to the U.S. Because the UK’s laws and regulations for swap dealers are grossly deficient, they are not comparable, and the CFTC must deny this request.

“However, rather than make that straightforward determination, the CFTC has inexplicable and improperly tried to manufacture comparability by imposing numerous material conditions on the UK’s regulators. That effort fails because the sheer number and variety of the conditions are compelling evidence – indeed, a de facto admission — that the UK’s regulations are not in fact comparable.  Ironically, in doing so the CFTC substitutes assertion for analysis in its proposed order, which isn’t comparable either.

“For example, the minimum initial capital requirement for nonbank swap dealers in the U.S. is 2000% more than in the UK. To remedy this indisputable non-comparability, the CFTC is requiring the nonbank swap dealers in the UK to dramatically increase their initial minimum capital to match U.S. rules.  Regarding reporting requirements, the CFTC imposes no fewer than a dozen filing requirements that the UK must meet as a condition for the comparability determination. The fact these conditions are required by the CFTC objectively proves that the UK’s regulations simply are not comparable and the CFTC’s attempt to rewrite them by imposing conditions does not change that fact.  Thus, the law compels the CFTC to deny the comparability request.

“The CFTC’s denial of this request is especially important because the UK’s regulators have failed to protect their own citizens and taxpayers in the past and because UK politicians are currently again engaging in a race to the regulatory bottom to prop up London’s financial sector. In the years before the 2008 crash, the UK lured global financial firms – like the U.S. swap dealers currently requesting comparability – to London with promises of so-called ‘light touch’ regulation, which was code for little if any regulation. While the UK won that race, its citizens and taxpayers lost, as did the world’s financial systems and economies, when it all blew up in 2008.

“History is repeating itself today because UK politicians are currently trying to overcome the damage done by Brexit that forced much of finance to relocate from London to the EU. In trying to make London appealing to financial firms, both major parties are campaigning to be the greatest ‘champion’ of finance in London, which means less regulation, the siren song of financial firms worldwide. That directly endangers America’s citizens, taxpayers, and economy if the CFTC fails to undertake a robust comparability determination and deny the pending request.”

Read our comment letter here.


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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