Gensler stated the proposal will include interpretive guidance on how the reforms apply to cross-border swap activities and an overview as to when overseas swaps market participants, including swap dealers, can comply with Dodd-Frank reforms through reliance on comparable and comprehensive foreign regulatory regimes, or "substituted compliance."
The main elements of the proposal will likely included:
- When a foreign entity transacts in more than a de minimis level of U.S. facing swap dealing activity, the entity would register under the CFTC's recently completed swap dealer registration rules.
- What it means to be a U.S. facing transaction.
- A tiered approach for requirements for overseas swap dealers.
- Entity-level requirements would apply to all registered swap dealers, but in certain circumstances, overseas swap dealers could comply with these requirements through substituted compliance.
- Transaction-level requirements would apply to all U.S. facing transactions, but for certain transactions between an overseas swap dealer and counterparties not guaranteed by or operating as conduits for U.S. entities, Dodd-Frank may not apply.