U.S. CFTC eases swaps rules for foreign regulators

Tue May 1, 2012 2:29pm EDT

* CFTC issues relief for overseas regulators

* Will allow access to US swaps data, avoid indemnity rules

* Overseas regulators must have similar swaps reporting

By Alexandra Alper

WASHINGTON, May 1 (Reuters) - The U.S. Commodity Futures Trading Commission on Tuesday issued guidance that would free foreign regulators from signing costly indemnification agreements in exchange for access to U.S. swaps data.

The indemnification agreements, which were called for in the 2010 Dodd-Frank financial oversight law, would make foreign regulators liable for any costs arising from lawsuits over the data that was shared.

The Commission cited "traditions of mutual trust and cooperation among international regulators," in explaining the guidance, which will be open for public comment for 30 days.

"The Commission is working closely with international regulators on a collaborative approach regarding how data may be accessed by regulators," CFTC chairman Gary Gensler said in a statement.

Global policymakers are finalizing rules to add transparency to the swaps market after regulators were blindsided during the 2007-2009 financial crisis by the market damage tied to credit-default swaps like those used by insurer AIG.

Foreign regulators and some lawmakers have criticized the indemnification agreements as obstacles to data sharing seen as critical for monitoring counterparty risk across the global financial system.

The relief also comes amid mounting pressure on the agency and other U.S. regulators to reassure foreign regulators that the U.S. financial rules won't overlap or conflict with local regulations or put foreign firms at a disadvantage.

The CFTC's exemption would only apply to foreign regulators that require swaps repositories to register and report data locally as well.

The guidance will also exempt these regulators from signing certain confidentiality agreements.

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