On July 12, 2013, the CFTC adopted long-anticipated final cross-border guidance that provides guidelines for the application of the CFTC’s swap regulatory regime to cross-border swap activities. At the same time, the CFTC adopted a phase-in compliance schedule that extends, with material changes, the cross-border exemptive order issued by the CFTC in January 2013. The Final Guidance and the Exemptive Order address several important topics, including:
(1) the final definition of U.S. person for purposes of the CFTC’s swap regulatory regime;
(2) guidance on which swaps a non-U.S. person must include in, and can exclude from, its swap dealer de minimis and major swap participant threshold calculations;
(3) guidance on the types of offices the CFTC would consider to be a “foreign branch” of a U.S. swap dealer or MSP and the circumstances in which a swap transaction would be considered to be “with” such a foreign branch;
(4) guidance on how swap-related requirements will be applied to cross-border swap transactions and when substituted compliance would be available if the CFTC determines that a foreign jurisdiction’s rules are comparable to its own; and
(5) phased-in compliance periods for many of the swap regulatory regime’s requirements.