Swap Data: CFTC Gives Access to Non-U.S. Regulators (Fed. Reg. Version)

(Previously Published in Pre-Fed. Reg. Version)

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 was that the interpretative statement provides non-U.S. regulators with easier access to the relevant data than it does to U.S. regulators generally. 

Cross-Reference(s): Commodity Exchange Act Sec. 21(d) (Swap Data Repositories); Dodd-Frank Section 728.

Effective Date: October 25, 2012.

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 about 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.

View statement in full here (links externally to GPO website).


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