CFTC approves capital comparability order for nonbank swap dealers in EU
Tech CFTC approves capital comparability order for nonbank swap dealers in EU The Commodity Futures Trading Commission just made life a little easier for a specific slice of the derivatives world. On May 12, the agency issued a capital comparability determination that lets certain French nonbank swap dealers satisfy US capital and financial reporting requirements by complying with French law instead. In English: if youre a swap dealer based in France and registered with the CFTC, you no longer have to juggle two separate capital rulebooks. One set of rules, applied correctly, now covers both sides of the Atlantic. What the order actually does The determination grants what regulators call “conditional substituted compliance.” Specifically, the order applies to CFTC-registered nonbank swap dealers that are organized and domiciled in France. These firms already operate under the European Unions Investment Firms Regulation (IFR) and Investment Firms Directive (IFD), which govern how much capital non-bank financial firms must hold and how they report their financial positions. The CFTC looked at those EU rules and determined theyre comparable enough to its own capital and financial reporting requirements. So rather than forcing French firms to comply with both frameworks simultaneously, the agency is allowing them to rely on the European standards