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Dodd Frank and
Extraterritorial
Implications
Sione R. Perez
ITRN
Prof. Malawar
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Intent of Dodd Frank
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“The Wall Street reform bill will – for the first time –
bring comprehensive regulation to the swaps
marketplace. Swap dealers will be subject to robust
oversight. Standardized derivatives will be required to
trade on open platforms and be submitted for clearing to
central counterparties. The Commission looks forward to
implementing the Dodd-Frank bill to lower risk, promote
transparency and protect the American
public.”
- CFTC Chairman Gary Gensler 1
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CFTC
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The Dodd-Frank Act directed the CFTC to write regulatory
regime for the swaps market. The CFTC issued interpretive
guidance instead of regulations.2
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To address concerns regarding the interpretive guidance
that the CFTC issued on swaps as well as the impact it would
have on foreign institutions. 3
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Focus on one area in swaps, specifically over the counter
derivatives and swap execution facility (SEF) rules.
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The US has issued regulations on the area due to Dodd Frank
however the EU has yet to issue final regulations and at this
moment it appears the regulations may not harmonize. 4
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Impacts of US/EU Regulation
Harmonization
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This effort is part of a larger global effort instituted by the
G20 in 2009.5
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Given the strong ties between the US and EU economy
address the impact that inconsistent regulations would have.
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Will focus specifically on the impact of these regulations
between the US and EU, however this is part of a global effort
that the US will have to address.
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Links
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The U.S. Futures Commodity Trading Commission. “Dodd Frank Act.”
http://www.cftc.gov/lawregulation/doddfrankact/index.htm (accessed November 10, 2014) This is CFTC’s website in which they explain the impact of the Dodd Frank Act on the CFTC
and what actions they are taking.
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The path forward for EU-US derivatives regulation. 2013. International Financial Law Review
(09), http://search.proquest.com/docview/1443818802?accountid=14541 (accessed
November 11, 2014). – This article explains what the issues between the EU and the US are
regarding SEF rules.
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DerivAlert. “Derivatives 101” http://www.derivalert.org/faq/#1 - This is a helpful website to
explain what derivatives are and the role they place in the issues surrounding them.
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Cameron, Matt. 2012. CFTC's extraterritorial errors to be amended. FX Week
23, (33) (Aug 20): 9,
http://search.proquest.com/docview/1038147724?accountid=14541
(accessed November 11, 2014). – This article contains good information
regarding concerns internationally with the extraterritorial reach of the
Dodd Frank Act.
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“Global regulators challenge CFTC approach to cross-border swap regulation” By FIA Special
Report 13 November 2012
https://global.factiva.com.mutex.gmu.edu/ha/default.aspx#./!?&_suid=1415722129504055418
6207940802 (accessen November 11, 2014)- This article provides further background on
activities to address any extraterritorial aspects of the Dodd Frank Act.)