Regulators should "limit the scope of the rule only to the territory of the United States," European Union Financial- Services Commissioner Michel Barnier said in a letter to regulators. "Moreover, the current exemption for non-U.S. banks as well as for activities outside of the U.S. would appear very restrictive."
Michael Williams, managing director of Credit Suisse Securities LLC, warned that the rule could damage the U.S. economy.
"The practical impact of this narrow interpretation is likely to be reduced liquidity in U.S. markets and securities, migration of trading activities to other financial centers outside of the United States, and the development of alternative trading platforms outside of the United States, all of which are likely to lead to job losses within the United States," Williams wrote.
Not all the comment letters opposed the proposed rule. Senators Carl Levin of Michigan and Jeff Merkley of Oregon, the Democrats who drafted the provision, called the proposal from regulators "too tepid" and said it did "not fulfill the law's promise."
"Instead, the proposed rule seems focused on minimizing its own potential impact," the lawmakers said.