CFTC Commissioner O’Malia on Ensuring a Backup Plan on Cross-Border Guidance to Give Markets Certainty

CFTC Commissioner Scott D. O’Malia delivered a statement seeking an extension of the existing exemptive relief from the cross-border application of its Dodd-Frank rules.

Commissioner O’Malia asserted that the CFTC should not be forced into implementing a “take-it-or-leave-it” solution tied to an arbitrary deadline. In his statement, O’Malia discussed three options: a take-it option (finalize the guidance); a leave-it option (do nothing and let the relief expire); or an extension of the relief. According to Commissioner O’Malia, extending the relief is the most sensible option as it would serve several purposes. Namely, an extension of relief would:

  • Allow the Commission to develop a more workable final guidance that can be adopted when ready;
  • Allow for the Commission and international regulators to continue their ongoing cooperative efforts to harmonize the global regulatory framework; and
  • Improve coordination on the CFTC’s cross-border rules with the SEC, particularly on the foundational definition of “U.S. person.”

Since the existing relief was issued pursuant to the CFTC’s exemptive authority, the CFTC required to provide notice and comment. O’Malia has drafted a proposed extension to the exemptive order to issue for public comment. 

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