On September 16, 2013, ISDA published a representation letter for US banks in response to the CFTC's July 26, 2013 Interpretive Guidance and Policy Statement Regarding Compliance with Certain Swap Regulations (final guidance) on treatment of cross-border swaps under Dodd-Frank. The final guidance outlines when the CFTC will assert its authority over swap transactions that involve a non-US element (see Practice Note, US Derivatives Regulation: Cross-Border Application of Swaps Rules). ISDA's® representation letter is designed to help US banks with foreign branches comply with the final guidance.

The letter, which contains a short checklist, is intended to help US banks provide their counterparties with status representations to determine whether:

The letter permits a bank to identify itself as a US bank that is registered with the CFTC as a swap dealer or major swap participant and to represent that a particular foreign branch is the relevant office of the bank for purposes of the swap in question. The letter also permits the bank to represent that it has satisfied the requirements under the final guidance for the swap in question to be deemed a swap entered into by such foreign branch for purposes of the CFTC's swaps regulations.

ISDA also recently published a more general cross-border swaps representation letter for all market participants that is designed to facilitate compliance with the CFTC final guidance for both US and non-US entities, as well as two other publications designed to aid regulators and market participants in complying with CFTC Dodd-Frank derivatives regulations and in developing a cross-border regulatory compliance framework for the global derivatives market. For details, see Legal Update, ISDA Publishes Cross-border Swaps Representation Letter and Methodology.

For details on the final guidance, see Practice Note, US Derivatives Regulation: Cross-Border Application of Swaps Rules