Swap Data: CFTC Eases Access for Non-U.S. Regulators

The CFTC issued an interpretative statement as to the conditions under which information held by a Swap Data Repository could be accessed by a non-U.S. government.  The statement exempts foreign regulators from either entering into a confidentiality agreement relating to such data or from agreeing to any indemnity in connection with any litigation relating to the data.  Under the guidance, non-U.S. regulators can “access[] data in which they have an independent and sufficient regulatory interest, even if that data also has been reported pursuant to the CEA and Commission regulations.”  In order to access such data, the foreign regulator would have to have “oversight responsibilities” for the SDR in the foreign jurisdiction, but the SDR would not necessarily have to be “registered” in the foreign jurisdiction. 

The interpretation was issued by a 3-2 vote, with Commissioners Sommers and O’Malia dissenting.  One of the points made in the dissent is that the interpretative statement actually provides non-U.S. regulators with easier access to the relevant data than it does to U.S. regulators generally. 

 

Lofchie Comment:  According to the statement by CFTC Chairman Gensler, this interpretation gives non-U.S. regulators potential “unfettered access” to trading information held by an SDR in light of the “traditions of mutual trust and cooperation among international regulators.”  It would seem that, without stretching its authority, a non-U.S. regulator could obtain information as to any transaction involving any party which had a connection with the relevant non-U.S. jurisdiction or that was trading in a commodity or asset (e.g., energy) in which the non-U.S. jurisdiction had an interest.  This interpretation may be controversial, as various U.S. parties may believe that either they or the U.S. generally has an interest in imposing greater procedural restrictions on access to U.S. transactions by non-U.S. regulators.

 

Cross-Reference(s): Commodity Exchange Act Sec. 21(d) [Swap Data Repositories].

View statement in full here (links externally to CFTC website).
See also: Press Release; Gensler Statement of Support; O’Malia Statement of Dissent.

 

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