CFTC Takes it to the Wire (Again)

5July 2013: the CFTC announced a meeting to finalise controversial cross-border guidance.  The meeting will decide final rules as to Dodd-Frank’s extra-territorial jurisdiction, and will issue a new exemptive order enabling phased-in compliance.  The meeting is scheduled to take place on 12 July 2013, the last day before relief is due to expire.

The cross-border question goes to the heart of Dodd-Frank’s legislative efficacy, and has been the subject of heated debate and criticism, dividing the CFTC itself along partisan lines.  Outgoing Chairman Gensler has been typically forthright in his support for effectively global application.  Commissioner Scott O’Malia, an outspoken critic of the bill, has taken the other extreme in arguing for postponement of the issue (by implication- delaying debate until after Gensler’s departure).  The via media has been variously championed by Democrats Mark Wetjen and Bart Chilton, calling for a compromise form of substitutive compliance.  The final formulation will be the most consequential Dodd-Frank guidance to date.  It has the potential to remove a major source of uncertainty as well as pointing to the future direction of the post-Gensler CFTC. Those hoping for final clarity may be forgiven for not holding their breath.