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Better Markets Comment Letter on Cross-Border Application of the Registration Thresholds and Certain Requirements Applicable to Swap Dealers and Major Swap Participants

On March 9, 2020, Better Markets filed a comment on the Commodity Futures Trading Commission’s proposed rulemaking codifying and amending elements of its 2013 cross-border guidance.  The proposal, in essence, sets forth a regulatory framework for the application of U.S. law to non-U.S. activities and non-U.S. legal entities posing direct and significant risks to the U.S. financial system.  Better Markets agreed with certain aspects of the CFTC’s proposal.  However, it noted that numerous elements contravene the Commodity Exchange Act’s statutory commands to protect the safety and soundness of swap dealers, prevent disruptions to the integrity of derivatives markets, ensure the financial integrity of swaps transactions and the avoidance of systemic risk, and preserve the stability of the U.S. financial system.  The most problematic elements of the proposal open avenues for avoiding, if not evading, U.S. derivatives markets reforms and therefore must be substantially revised, or withdrawn, in the public interest. 

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