Reuters: Regulatory News: UPDATE 1-U.S. CFTC eases swaps rules for foreign regulators

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UPDATE 1-U.S. CFTC eases swaps rules for foreign regulators May 1st 2012, 20:47 Tue May 1, 2012 4:47pm EDT * CFTC issues relief for overseas regulators * Will allow access to US swaps data, avoid indemnity rules * Overseas regulators must have similar swaps reporting By Alexandra Alper WASHINGTON, May 1 (Reuters) - The U.S. agency that oversees futures markets on Tuesday moved to make it easier for foreign regulators to gain access to U.S. swaps data. The Commodity Futures Trading Commission proposed waiving a requirement that its overseas counterparts sign costly indemnification agreements called for in the 2010 Dodd-Frank financial oversight law that would make them liable for any costs arising from lawsuits over the data that was shared. The Commission cited "traditions of mutual trust and cooperation among international regulators," in explaining the guidance, which will be open for public comment for 30 days. "The Commission is working closely with international regulators on a collaborative approach regarding how data may be accessed by regulators," CFTC chairman Gary Gensler said in a statement. Global policymakers are finalizing rules to add transparency to the swaps market after regulators were blindsided during the 2007-2009 financial crisis by the market damage tied to credit-default swaps like those used by insurer AIG. Foreign regulators and some lawmakers have criticized the indemnification agreements as obstacles to data sharing seen as critical for monitoring counterparty risk across the global financial system. The relief also comes amid mounting pressure on the agency and other U.S. regulators to reassure foreign regulators that the U.S. financial rules won't overlap or conflict with local regulations or put foreign firms at a disadvantage. Republican CFTC Commissioner Jill Sommers expressed her approval of the guidance, but said a "legislative fix" was the only real solution for giving foreign and domestic timely access to data. "The Commission should publicly support repeal of the indemnification provisions," she said in a statement. An official at the Securities and Exchange Commission endorsed a repeal at a Congressional Panel in March. The SEC faces a similar indemnification provision. A bipartisan bill to repeal the provision passed out of the House Financial Services Committee in March but it is not on a fast track to passage. The CFTC's exemption would only apply to foreign regulators that require swaps repositories to register and report data locally as well. The guidance will also exempt these regulators from signing certain confidentiality agreements. Link this Share this Digg this Email Reprints

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