ISDA appreciates the opportunity to provide comments to the US Commodity Futures Trading Commission (CFTC) regarding the Cross-Border Application of the Registration Thresholds and Certain Requirements Applicable to Swap Dealers and Major Swap Participants published in the Federal Register on January 8, 2020.

We commend the Commission’s efforts to recalibrate its cross-border regime through the rulemaking process to better reflect its authority over cross-border transactions and reverse certain negative consequences that resulted from the application of the 2013 Cross-Border Guidance. Revisiting the cross-border regime is especially timely given that other nations have made significant progress in implementing the 2009 G-20 derivatives reforms.

We support the Commission’s proposed holistic, outcomes-based approach to issuing comparability determinations. We agree that the CFTC should assess the laws of foreign jurisdictions based on a common set of principles with an understanding that jurisdictions may have implemented the G-20 derivatives reforms from slightly different perspectives, and look to adopt a substituted compliance regime based on comparable, rather than identical, approaches to derivatives regulations.

Changes to the current cross-border regulatory framework are not only timely, but are also necessary. In some instances, the current framework has created regulatory barriers to access global liquidity, increased capital requirements and costs, added operational complexity and risk, and imposed burdensome duplicative compliance obligations, which ultimately diminish their intended regulatory benefit.

To further refine the cross-border regime, we have identified four aspects of the Proposal that warrant the Commission’s additional consideration, which are explained in more detail later in the letter.

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