On June 28, 2012, the Commodity Futures Trading Commission (the “CFTC”) proposed interpretative guidance (the “Interpretive Guidance”) regarding the cross border application of certain swap provisions of the Commodity Exchange Act (the “CEA”) and requested comments in relation to the Interpretive Guidance. The comment period is open for 45 days following publication of the Interpretive Guidance in the Federal Register.

Section 722(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) amends Section 2 of the CEA by inserting new paragraph (i) entitled “Applicability” which consists of two subsections. Section 2(i) provides that the provisions added to the CEA by Title VII of the Dodd-Frank Act shall not apply to activities outside the United States unless those activities: (1) have a direct and significant connection with activities in, or effect on, commerce of the United States; or (2) contravene such rules or regulations as the CFTC may prescribe or promulgate as are necessary or appropriate to prevent the evasion of any provision of the CEA that was enacted by the Dodd Frank Act. Section 2(i) therefore gives the CFTC express authority over activities outside the United States that have a direct and significant connection with activities in, or effect on, commerce of the United States.

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