“Just Say’n”

Statement of Commissioner Bart Chilton on Cross-Border Guidance and Exemptive Order, Washington, DC

July 12, 2013

We’ve done a lot of rules and we’ve done way more than other financial regulators. We have final clearing and transparency rules, recordkeeping, reporting, and registration rules, and we’re working hard to finalize other important areas (like, just gotta say, position limits and I hope we more actively engage on Volcker). We’ve done a heckuva job on a lot of issues. All of these are super important. Nothing we’ve done, however, will fully succeed without the critical action that I hope we will take today. Just say’n.

That’s because we don’t live in a void all to ourselves. We live in a world with intricate, inter-connected, interdependent international markets. There is a commonality of connections like never before in history. What happens in one nation impacts another. Risk travels around the globe with a click of the mouse.

We’ve learned that hurting lesson and come to this point where we can move forward. Here are the two key takeaways for me on what we can do today:

1. We can provide certainty to markets and market participants to give needed structure in our rapidly changing financial world;

2. We can do so in a fashion—through phased-in effective dates for rules—that is cognizant of other global regulators, particularly those in the European Union.

Like in the movie Field of Dreams, when the voice from the corn field says, “If you build it, he will come.” I’ve said repeatedly that if we and the E.U. build balanced and fairly harmonized financial regulatory regimes, the rest of the world will come. The rest of the world will build similar regulatory structures. And that’s the ticket to protecting consumers: a network of fairly comparable and comprehensive rules that guard against systemic risks for us, but for other nations as well.

Now, before I finish, there’s a key concept I want to highlight for all the naysayers out there. The economy crashed in 2008. Dodd-Frank was passed in 2010 and required—required—us to implement it in 2011. The G-20 even agreed that swaps reform should be done in 2012. We’ve had a guidance document floating around here for half-a-year. My point, and I do have one, is this: it isn’t like this regulatory reform or this guidance snuck up on us. And, there isn’t any reason for folks to come down with acute Reguphobia at this state of play—paranoia will destroya.

At the same time, we’re always going for balance, so let me highlight the important comment period here: 75 days. We want them, we need them, gotta have ‘em! I hope and expect to hear from the public on any and all issues relating to our implementation of Dodd-Frank—on all fronts. We all are down in the weeds implementing these things, and if we need to tweak or adjust, work on a few kinks, on any issue, from implementation of cross-border trading requirements to indemnification guidance—let us know. And to that end, let me reiterate something I said in October and repeated in December: during this interim period of phased in compliance, I cannot envision nor would I support the agency taking any action against an entity engaging in good faith compliance, nor can I envision an action in the future taken retroactively for non-compliance in this interim period. We’ve all gotta use a common sense, reasonable man standard here.

(Oh, and by the way, while your commenting, please feel free to tell us if we got something right, as well!)

We all know that once in a while regulators can leave a thread hanging loose, ‘cause ooh, we aren’t always perfect. In this regard, I plan to engage the Global Markets Advisory Committee (GMAC) during this comment period to ensure we have a live-action forum to hear from folks (not that people have been shy about airing their concerns to date).

Finally, I express my sincere gratitude to the Chairman for his tireless work on all of these issues. I also thank my colleagues, Commissioner Sommers (whom we will miss), Commissioners O’Malia and Wetjen and their staffs. Finally, special heartfelt thanks to the professional agency staff who have worked exceedingly hard on this key component of financial reform. We need to honor your tireless work by passing this thing—the guidance and phased-in compliance—today. Not to do so would allow consumers and our economy to be unprotected. That just wouldn’t be right. Just say’n.

Thank you.

Last Updated: July 12, 2013