The futures industry lobbying organizations based in the U.S. and Europe are combining to address financial regulation on a global scale, the groups said in a statement.
The Futures Industry Association, based in Washington, will merge with the London-based Futures & Options Association to create FIA Global, they said in a joint statement today. The groups’ members include the world’s largest banks such as JPMorgan Chase & Co., Goldman Sachs Group Inc., Deutsche Bank AG and Barclays Plc.
The majority of commissioners at the Commodity Futures Trading Commission have signaled they want to delay final action on how new derivatives rules created by the Dodd-Frank Act of 2010 apply to foreign banks and the overseas affiliates of U.S. banks and hedge funds. CFTC Chairman Gary Gensler has insisted the agency should take its final vote on the guidance by July 12, when the current deadline expires.
Lawmakers in the U.S. House of Representatives last week passed legislation that would curb the CTFC’s authority to oversee the $633 trillion global swaps market. While the bill is not expected to be introduced in the Senate, the House vote could increase pressure on Gensler to agree to a delay.
“This new affiliation will address a major industry concern -- the fragmentation of derivatives markets along jurisdictional lines,” Walt Lukken, chief executive officer of the FIA, said in the statement.
The international reach of CFTC swap-trading requirements has been one of the most controversial elements of Dodd-Frank. The CFTC became the predominant U.S. regulator of swaps under the law, while the Securities and Exchange Commission was assigned to write rules for equity and some credit-default swaps.
The European Union is seeking an agreement with the U.S. that its banks can be exempted from the CFTC’s rules because it says EU standards are equally rigorous. Overseas regulators have called for the CFTC to broaden its use of such “substituted compliance,” which was also incorporated into the SEC’s proposed rule.