NEW YORK, April 22 The U.S. regulator overseeing
the futures and options market is exploring ways to give large
foreign banks and overseas subsidiaries of U.S. lenders a
reprieve from planned stringent derivatives rules, the Financial
Times reported on Sunday.
New regulations such as higher capital requirements, central
clearing and tighter business conduct standards are among the
directives planned at reducing the systemic risk of derivatives.
The Commodity Futures Trading Commission (CFTC) is looking
to grant a temporary exemption to swap dealers from complying
with a number of post-financial crisis regulations governing
derivatives transactions, the FT reported, citing people
familiar with the matter.
The CFTC is examining, for example, whether a U.S. bank's
foreign subsidiary transacting with foreign counterparties
should be exempt from some new rules governing derivatives
dealers if the subsidiary's home country financial supervisors
adopt robust oversight, the report said.
A foreign bank's derivatives desk also may be exempt from
U.S. rules if its national regulator employs rules closely
mirroring those of the CFTC, the FT reported.
In 2009, the G20 agreed on setting new swaps rules by the
end of 2012 "at the latest".
U.S. banks, including JPMorgan Chase & Co, have
warned that if their overseas subsidiaries are forced to adhere
to U.S. rules, they risk losing business to the likes of
Deutsche Bank and Barclays.
The internal discussions between CFTC chairman, Gary
Gensler, and his staff are preliminary and have not yet resulted
in formal policy, the report said.