Dodd-Frank Swap Rules Delayed Six Months for Overseas Trades

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http://www.bloomberg.com/news/2012-12-21/dodd-frank-swaps-rules-delayed-six-months-for-overseas-trades.html

The largest Wall Street banks and foreign-based financial companies won a six-month delay in some swap regulations for overseas trades, even as they must begin registering with U.S. regulators by year-end.

The Commodity Futures Trading Commission, the main U.S. derivatives regulator, voted 4-1 to leave the registration deadline in place while providing a delay until July 12 for capital and other requirements for overseas operations of JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and other banks, the agency said in a statement yesterday. The CFTC also reduced the number of overseas offices immediately registering.

“There is a lot of work to be done with international regulators,” CFTC Chairman Gary Gensler said in a telephone interview. “It’s my firm belief that if reforms were not to cover the branches and affiliates of U.S. entities either directly or through substituted compliance the public would be left without critical protections.”

The international reach of CFTC swap rules has been one of the most controversial elements of the agency’s Dodd-Frank Act rules, prompting opposition from financial companies including JPMorgan, Goldman Sachs and Barclays Plc. (BARC) The agency has also faced criticism from European and Asian regulators over the reach of a rule requiring trades to be guaranteed at clearinghouses and traded on exchanges or other platforms.