The European Commission has urged US to allow time for international talks before it imposes swaps rules on EU lenders.
In a letter to Gary Gensler, chairman of the US Commodity Futures Trading Commission, the EC said the current timetable would lead to "huge legal and operational uncertainty."
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The letter urged him to extend a temporary exemption for overseas banks, which is due to expire on 12 July 2013. Under a temporary exemption granted last year, foreign-based banks and overseas operations of US banks don’t need to count trades they have with non-US clients to determine whether they cross the threshold requiring registration with the CFTC.
Gensler is pushing to finalize the guidance before an exemption for foreign market participants expires, imposing the rules more widely.
The European Commission urged the CFTC to extend the exemption until leaders of the Group of 20 countries have agreed international principles on cross-border swap rules.
The international reach of CFTC swap trading requirements has been one of the most controversial elements of the agency’s Dodd-Frank Act rules, prompting opposition from financial companies including Goldman Sachs and Barclays.
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By GlobalDataThe European Commission also sought additional public comment on how to define US entities and foreign branches of US companies.
