March 10, 2015

CFTC Solicits Public Comment in Response to the U.S. District Court Order Regarding Cross-Border Litigation

Washington, DC — The U.S. Commodity Futures Trading Commission (Commission) today published in the Federal Register a request for public comment in response to the United States District Court for the District of Columbia’s remand order in Securities Industry and Financial Markets Association, et al. v. United States Commodity Futures Trading Commission (Cross-Border Litigation).

In the release, which was approved unanimously by seriatim vote, the Commission clarifies its consideration of costs and benefits of 10 rules subject to the order. The Commission explains that its consideration of costs and benefits in the rulemaking proceedings reflected all evidence of costs and benefits in the administrative record, whether relevant to domestic activity, overseas activity, or both. The Commission solicits public comment on: Which of the costs and benefits identified similarly apply to the rules’ extraterritorial applications, and what differences, if any, exist.

The Commission explains that, following review of the comments, it will publish a further response (or responses) to the remand order which would include any necessary further supplementation of or changes to its consideration of costs and benefits of the rules and address whether any changes to the substantive requirements of the rules are warranted.

Comments regarding the Cross-Border Litigation may be submitted electronically through the CFTC’s Comments Online Process. All comments must be received on or before May 11, 2015 and will be posted on the CFTC’s website.

In the Cross-Border Litigation, three trade associations challenged the Commission’s 2013 Interpretive Guidance and Policy Statement Regarding Compliance With Certain Swap Regulations asked the court to vacate 14 swap regulations to the extent of their application to overseas activities.

On September 16, 2014, the U.S. District Court for the District of Columbia granted summary judgment in favor of the Commission in most respects and denied the plaintiffs the relief they were seeking. However, while the court left the Commission’s regulations in force, it remanded 10 swap regulations to the Commission to supplement its consideration of costs and benefits as to those 10 regulations. Specifically, the court directed the Commission to make explicit which of the costs and benefits previously identified in the rule preambles similarly apply to the rules’ extraterritorial applications, and to give further consideration to the substantive requirements of each rule in light of any differences not previously identified.

[See CFTC Cross-Board Remand Federal Register Notice and CFTC 2013 Interpretive Guidance and Policy Statement Regarding Compliance With Certain Swap Regulations under Related Links.]

Last Updated: March 10, 2015