External Meetings: Meeting with Institute of International Bankers

The meeting discussed how the Dodd Frank swap dealer requirements would apply to non-U.S. banks with swap activities that relate to the U.S.
The Institute of International Bankers (IIB) said non-U.S. banks that enter into swaps with U.S. customers would register as swap dealers, but IIB proposed that the registration be limited to the non-U.S. banks’ swap activities that involve the U.S.  The IIB said requirements would apply to these non-U.S. banks as follows:  capital and risk-management requirements should apply entity-wide (even if some activities related to the swaps occur in the U.S.); for organizational requirements (chief compliance officer, information barriers, etc.), the CFTC should defer to requirements set by the home country regulator, if comparable to Dodd Frank requirements; and Dodd Frank requirements that are specific to a particular swap would apply to all swaps with U.S. customers.  The IIB said that the CFTC should defer to comparable requirements of home country regulators for reasons of international comity and efficiency. 
The IIB also said the CFTC should consider phasing in the Dodd Frank requirements for swap dealers on roughly the same schedule as the EU implements its requirements, in order to promote harmonization.  The IIB is concerned that applying Dodd Frank requirements to non-U.S. banks too quickly or too broadly would be unwieldy to enforce and create market uncertainty.
IIB provided the attached chart and paper to explain its position.