March 27, 2019

CFTC unanimously approved a comparability determination and finds the margin requirements for uncleared swaps under the laws of Australia and the regulations of APRA comparable in outcome to those under the Commodity Exchange Act and CFTC regulations. CFTC has published, in Federal Register, its analysis and determination regarding a request by APRA. The request was for CFTC to determine that laws and regulations applicable in Australia provide a sufficient basis for an affirmative finding of comparability with respect to margin requirements for uncleared swaps applicable to certain swap dealers and major swap participants registered with CFTC. Additionally, CFTC published Statements of CFTC Chairman J. Christopher Giancarlo, Commissioner Brian Quintenz, and Commissioner Dan M. Berkovitz on the comparability determination for Australia.

Substituted compliance describes the circumstances in which CFTC would permit swap dealers or major swap participants subject to the rules of a foreign jurisdiction, but whose swaps activities bring them within the scope of certain CFTC regulations, to use compliance with regulations in the foreign jurisdiction as a substitute for compliance with the relevant CFTC regulations. This approach builds on CFTC’s long-standing policy of recognizing comparable regulatory regimes based on international coordination and comity principles with respect to cross-border activities involving futures and options. In accordance with the CFTC policy framework described in its “Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants – Cross-Border Application,” which was announced on May 24, 2016, the comparability determination is part of substituted compliance with respect to CFTC regulations applicable to swaps activities outside the U.S. The approval of CFTC also reflects a collaborative effort with APRA and market participants from Australia. Working with APRA, CFTC can provide a comparability determination for all uncleared swap margin requirements.

 

Related Link: Federal Register Notice

 

Keywords: Americas, Asia Pacific, US, Australia, Banking, Securities, Comparability Determination, Margin Requirements, Uncleared Swaps, APRA, CFTC