In response to SIFMA, ISDA, and the Institute of International Bankers (the “Associations”) opposition to the CFTC’s request to file a supplemental declaration, the CFTC submitted a reply to the Court stating that the Associations’ opposition only underscores the declaration’s relevance to the CFTC Cross-Border Guidance case.
According to the CFTC, the Associations have advanced inconsistent theories regarding how to interpret CEA Section 2(i). The CFTC explained that one of these theories, which coincides with the CFTC’s interpretation, is supported by an internally-circulated SIFMA document filed in the CFTC’s supplemental declaration (“SIFMA’s Note”).
Additionally, the CFTC explained that despite the Associations’ argument in its opposition that SIFMA’s Note only mentioned the word “guidance” once, it “clearly” refers to the CFTC Guidance as guidance, which is “direct evidence” contradicting the Associations’ claims that “they reasonably believe the Guidance to be a binding rule.”
The CFTC further argued that SIFMA’s Note demonstrates that there were multiple reasons for Plaintiff’s members to de-guarantee swaps. Consequently, there was no coercion by the CFTC guidance to de-guarantee so there is no standing in this case. According to the CFTC, “if SIFMA’s Note is not considered, there is no evidence at all of why the Plaintiffs’ members have changed their business practices, disabling the Court from assuring itself of its own jurisdiction.”
See: CFTC’s Reply in Support of Motion to File Supplemental Declaration. Related news: Associations Submit Opposition to CFTC Motion to File Supplemental Declaration in SIFMA v. CFTC Cross-Border Guidance Case (July 24, 2014); Parties Submit Supplemental Briefs in SIFMA v. CFTC Cross-Border Guidance Case (July 22, 2014); CFTC Files Supplemental Declaration in CFTC Cross-Border Guidance Case (July 18, 2014).