Following the news that the U.S. District Court for the District of Columbia largely rejected a challenge to the way the Commodity Futures Trading Commission applies its derivatives rules overseas, Congresswoman Maxine Waters (D-CA) Ranking Member of the Financial Services Committee, released the following statement:
“Today, proponents of financial reform secured a major victory as a U.S. district court rejected industry attempts to vacate the Commodity Futures Trading Commission’s (CFTC) guidance governing the international regulation of our global swaps market. In a thorough 92-page opinion, the court rebuffed industry’s arguments, stating unequivocally that the swaps provisions within the Dodd-Frank Act could be applied to businesses engaging in activities overseas.
I am pleased with this decision, as I have long been concerned that allowing this behavior to go forward would allow almost the entire global swaps market to evade United States regulation simply by trading through a foreign subsidiary or foreign exchange. It is in the best interests of American taxpayers that the U.S. District Court has expressed an understanding that these efforts to evade important U.S. regulations are contrary to Congressional intent, and only serve to harm consumers and our economy in the long run.”
Previously, Waters spearheaded the amicus brief in support of the CFTC’s position, with 19 current and former members of Congress. The lawmakers wrote: “the relief sought by the plaintiffs in this action. . . would allow swaps-market participants to evade United States regulation of almost the entire global swaps market by the expedients of trading swaps through foreign subsidiaries or booking swaps on foreign trading desks or exchanges.”