On July 12, the Commodity Futures Trading Commission adopted interpretive guidance and a policy statement regarding the cross-border application of the swap provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act and an exemptive order that provides conditional relief for certain market participants. The interpretation and policy statement provide guidance on (i) the definition of US person (which now includes offshore collective investment vehicles that are managed in the United States); (ii) the de minimis calculation used to determine swap dealer (SD) and major swap participant (MSP) status for a non-US person (including the treatment of swaps with guaranteed and conduit offshore affiliates of US persons); and (iii) the manner in which entity-level and transaction-level requirements apply to non-US persons registered as US SDs and MSPs (including more detail about the process for obtaining determinations of when substituted compliance may apply). The exemptive order allows market participants to continue to apply the US person definition and SD and MSP calculations provided in the CFTC’s January 7, 2013 exemptive order for 75 days after the interpretive guidance and policy statement is published in the Federal Register and also provides temporary relief from certain transaction-level and entity-level reporting requirements for non-US SDs and MSPs and foreign branches of US SDs and MSPs located in Australia, Canada, the European Union, Hong Kong, Japan or Switzerland. Additional details will be provided in a forthcoming Katten Client Advisory.
The interpretive guidance and policy statement is available here.
The exemptive order is available here.