Businesses concerned about SEC international swaps proposal

{mosads}“Financial regulatory reform measures should promote economic stability and transparency without imposing undue burdens on derivatives end-users. Imposing unnecessary regulation on derivatives end-users, which did not contribute to the financial crisis, would create more economic instability, restrict job growth, decrease productive investment, and hamper U.S. competitiveness in the global economy,” they said in the letter.

The groups also want the SEC to be sure that it sets the same rules for financial and nonfinancial derivatives buyers alike.

The SEC recently proposed regulations for the international derivatives market. The rules detail when foreign standards can stand in for American requirements, a framework known as “substituted compliance.”

The Commodity Futures Trading Commission is also developing its own rules for the global swaps market.

Lawmakers have worried that the two agencies are taking different approaches to their regulations. In June, the House voted to make the agencies issue a single rule. 

In the letter, the business organizations urged the two agencies to work together.

“Conflicting regulatory regimes will lead to an inefficient financial system, increasing compliance costs without securing any further reductions in systemic risks,” they wrote.