An effort to avoid regulatory arbitrage in
uncleared swap margin regulation may force banks to change
course on plans to de-guarantee foreign subsidiaries.
The Commodity Futures Trading
Commission’s (CFTC) latest proposal, released on June 29, is a hybrid of
plans the CFTC put forward last year to address a lack of
cross-border regulation in the swap market. The plan, which was
unanimously voted on by the commissioners, would take a broad
approach to what is captured by the regulatory net, and goes
counter to guidance that was previously issued.
"As cross-border regulations look to move to a more
harmonised approach and lower risk it may be that people take a
wait-and-see approach," said Anthony Perrotta, head of fixed
income research for the Tabb Group. "We haven’t