The Commodity Futures Trading Commission’s Market Participants Division and Division of Enforcement released procedures for CFTC-registered non-US swap dealers and major swap participants relying on substituted compliance, setting out how staff will respond to potential non-compliance with foreign requirements deemed comparable to the Commodity Exchange Act or CFTC regulations. The procedures are framed around international comity and deference to the relevant foreign regulator, including that the foreign regulator interprets and applies the home-country rules. CFTC staff generally will not pursue an inquiry where the foreign regulator has determined the firm is in compliance with the comparable standards, or where the foreign regulator is addressing the issue through its supervisory process. Substituted compliance inquiries will be handled by the Market Participants Division unless it determines a supervision or non-compliance issue is material and refers it to the Division of Enforcement under CFTC Staff Letter 25-13. The procedures were developed following a guidance request jointly submitted by the Institute of International Bankers, the International Swaps and Derivatives Association, and the Securities Industry and Financial Markets Association.
Commodity Futures Trading Commission 2025-05-20
Commodity Futures Trading Commission publishes procedures for handling substituted compliance issues for non-US swap dealers and major swap participants
The Commodity Futures Trading Commission (CFTC) released procedures for non-US swap dealers and major swap participants registered with the CFTC, focusing on substituted compliance with foreign regulations comparable to the Commodity Exchange Act. The procedures emphasize international comity, deferring to foreign regulators' interpretations and supervisory processes. The Market Participants Division will handle inquiries unless a significant issue arises, which will then be referred to the Division of Enforcement.