CFTC Guidance
Top officials from the EU, Britain, France, Germany, Switzerland, South Africa, Russia, Brazil and Japan have called for changes to guidance proposed by the Commodity Futures Trading Commission. The guidance, which the U.S. industry has opposed as well, would cover transactions involving overseas offices of U.S. banks and hedge funds incorporated offshore.
A separate set of regulations, proposed by the Securities and Exchange Commission, would cover some types of swaps. That set has garnered more support from the industry.
Neither set of rules has been finalized.
Mac Destler, a professor at the University of Maryland who studies the politics of trade policy, said negotiators could opt to include provisions in the trade agreement that do less than simply reverse existing regulation. For example, they could include deals to consult in the future where rules on finance conflict, or declare that current regulations are grandfathered into a trade pact.
“If you say you’re going to have a full-out big agreement, it’s pretty hard to say you’re going to carve out the regulatory regime entirely,” Destler said in an interview. “The harder question is how far you go.”
Bloomberg LP, the parent company of Bloomberg News, wrote a Feb. 26 letter to the Office of the U.S. Trade Representative supporting the WTO agreement because it would improve the market for financial services information.