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ISDA supports the Commission’s proposed holistic, outcomes-based approach to issuing comparability determinations. It agrees that the CFTC should assess the laws of foreign jurisdictions based on a common set of principles with an understanding that jurisdictions may have implemented the G-20 derivatives reforms from slightly different perspectives, and look to adopt a substituted compliance regime based on comparable, rather than identical, approaches to derivatives regulations.
Changes to the current cross-border regulatory framework are not only timely, but are also necessary. In some instances, the current framework has created regulatory barriers to access global liquidity, increased capital requirements and costs, added operational complexity and risk, and imposed burdensome duplicative compliance obligations, which ultimately diminish their intended regulatory benefit.
To further refine the cross-border regime, ISDA has identified four aspects of the Proposal that warrant the Commission’s additional consideration.
ANE Transactions:
Cross-Border Application of the Swap Dealer (“SD”) De Minimis Threshold
Application of Category B and C Requirements:
Definition of Swap Conducted through a U.S. Branch