Associations Submit Opposition to CFTC Motion to File Supplemental Declaration in SIFMA v. CFTC Cross-Border Guidance Case

SIFMA, ISDA and the Institute of International Bankers (the “Associations”) submitted to the Court an opposition to the CFTC’s recent motion to file a supplemental declaration (“Motion”) in the lawsuit filed against the CFTC Cross-Border Guidance. 

The CFTC’s supplemental declaration consisted of a declaration from CFTC Assistant General Counsel, Martin B. White, and two additional documents that, according to the CFTC, contradict “the positions SIFMA and other Plaintiffs have taken on key legal points in this case.” Specifically, the two exhibits include (i) a document titled “Note Regarding Non-U.S. Affiliate Participation in Swaps Market” (“SIFMA Note”), and (ii) a copy of an article published by POLITICO Pro titled “Banks Outline Pushback on Swap Guarantee Worries.”

According to the Associations, the CFTC Motion should be denied because “[h]earsay statements in a recent news article are not an appropriate part of the Court’s record in an administrative rule challenge.”  Additionally, the Associations stated that the SIFMA Note was intended for internal reference, and not for public filing or distribution. 

Moreover, the Associations explained that the arguments constructed by the CFTC based on the SIFMA Note are baseless, stating that the SIFMA Note is “irrelevant to this Court’s construction of Section 2(i),” and does not, as the CFTC argues, assert that the CFTC’s Cross-Border Guidance is guidance just “by using that word once.”  Further, the CFTC Motion argued that the Associations’ standing in the case is undermined by the fact that some of the Associations’ members had changed their practices in response to the Cross-Border Guidance, as indicated in the SIFMA Note.  According to the Associations, however, this point actually proves their standing since the Associations “indisputably” have standing to challenge regulations that require them to restructure their businesses. 

The Associations’ stated that ultimately, the SIFMA Note “shows that the regulated public does not view the Cross-Border Rule as mere ‘guidance’ that may be considered at its option, but rather as a regulatory dictate that imposes overlapping burdens and compels the restructuring of their global business activities.”

See: Associations Opposition to CFTC Motion to File Supplemental Declaration.