The U.S. Chamber of Commerce (the “Chamber”) submitted an amicus brief in support of the ISDA, SIFMA and the Institute of International Bankers’ (“IIB”) (together, the “Associations”) motion for summary judgment in the case filed against the CFTC’s Interpretive Guidance and Policy Statement Regarding Compliance with Certain Swap Regulations (the “Cross-Border Rule”).
According to the Chamber’s amicus brief, the CFTC Cross-Border rule reflects a troubling pattern of administrative agencies’ labeling their regulations as “policy statements” or “guidance” to circumvent the procedural requirements of legislative rulemaking. The Chamber stated that the CFTC sought an “advantage” by proceeding to “issue or amend its real rules, i.e., its interpretative rules and policy statements, quickly and inexpensively without following any statutorily prescribed procedures,” and with the hope of evading judicial review.
The Chamber went on to state that the Cross-Border Rule is a substantive legislative rule, not a mere statement of policy, despite the CFTC’s use of the modifier “generally”. Additionally, the Chamber noted that even if the CFTC were correct in characterizing the Rule as a policy statement, such a statement would still qualify as a “regulation” under the CEA. The Chamber said that even if the Cross-Border Rule were not a regulation, the CFTC would contemplate the extraterritorial application of its Title VII regulations; therefore, it had a duty to evaluate all costs and benefits (domestic and extraterritorial) of those regulations before promulgating them.
The Chamber concluded by stating that the CFTC has impermissibly converted a statutory prohibition on extraterritorial swaps regulation, with limited exceptions for certain activities, into a warrant to engage in the unprecedented status-based regulation of foreign financial institutions and transactions.
See: Chamber of Commerce Amicus Curiae.
See also: SIFMA Statement and Declarations Regarding Standing; SIFMA Opposition to CFTC Motion to Hold in Abeyance; CFTC Motion to Hold in Abeyance; SIFMA Motion for Expedited Consideration of Summary Judgment; SIFMA v. CFTC Amended Complaint; SIFMA Motion for Summary Judgment; SIFMA v. CFTC Civil Docket.
Related news: Market Participants File Statement to Explain Their Standing in Lawsuit Challenging CFTC Cross-Border Guidance (January 29, 2014); Market Participants File Opposition to CFTC’s Motion to Delay Judgment in Lawsuit Challenging CFTC Cross-Border Guidance (January 17, 2014); Market Participants File Amended Complaint Challenging CFTC Cross-Border Guidance (January 8, 2014); Market Participants File Lawsuit Challenging CFTC Cross-Border Guidance for Being a Rule Adopted in Violation of the APA (December 4, 2013); CFTC Commissioner O’Malia Dissents from CFTC Cross-Border Guidance Statement (July 19, 2013); CFTC Approves Cross-Border Guidance and Exemptive Order (July 15, 2013).