The proposal for Cross-Border Guidance and accompanying exemptive phase-in order has been approved by the CFTC in a 3-1 vote.
Regulators have broken a worrying stalemate between the CFTC and the European authorities; worrying because it threatened to split derivatives trading along jurisdictional lines, with US entities unable to clear through European infrastructure and vice versa. The agreement settled the dispute between the US and EU by declaring certain sections of Dodd-Frank and EMIR to be equivalent.
No-action relief of certain CFTC rules has been extended to market participants and will apply to overseas branches of U.S. banks and foreign banks that do business with those firms. This will apply from July 13 2013 until 75 days after guidance is published in the Federal Register.
The guidance will detail what CFTC rules can be eligible for substituted compliance and will mainly apply to transaction level rules such as those affecting clearing, margin allocation, trade execution and direct access. It also has the effect of changing the definition of U.S person, which will broaden the scope of what entities fall under the scope of CFTC rules.
The final guidance and the no-action relief can be found here
RegRisk Legal Solutions Limited has taken all reasonable care and skill in the compilation of this guidance. However, it shall not be under any liability for loss or damage (including consequential loss) whatsoever or howsoever arising as a result of errors or omissions or the use of this publication by the users, whomever they may be. RegRisk Legal recognises that some of the terms appearing in this report are proprietary. All such trademarks are acknowledged and every effort has been made to indicate them by the normal UK publishing practice of capitalisation. The presence of a term in whatever form does not affect its legal status as a trademark.