While warning of the danger of swaps-trading risks taken abroad damaging U.S. economy, CFTC Commissioner Mark Wetjen noted that he is not fully satisfied with extraterritoriality rules as currently proposed during a speech at ISDA’s Annual North American Conference.
“I continue to have concerns about the clarity, scope, and workability of the proposals in certain areas,” he said.
Internal disputes at the agency over the extraterritoriality rules are thought to be ongoing. Wetjen’s vote is critical, as he has distanced himself from CFTC Chairman Gary Gensler on the issue, after voting with him on every previous Dodd-Frank rule
As a result of Wetjen’s concerns, the proposal was issued in June as “interpretive guidance” rather than a more formal “proposed rule.” He also called for the financial industry to have more time to comply.
Mr. Wetjen has also been a driving force behind substituted compliance, also favored by industry groups, which would allow foreign banks to comply with local regulations in lieu of CFTC rules if the two are similarly rigorous.
“In light of the commission’s limited resources, efficient regulation through deference to comparable regulation just makes sense,” he said.
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