On June 9, 2015, CFTC Chairman Timothy Massad announced in a speech before the FIA International Derivatives Conference a plan to require the non-US affiliates of US banks to comply with CFTC rules for uncleared swaps, even where the non-US affiliate enters into the swap with a non-US counterparty. This would close a loophole under which parties avoid the application of Dodd-Frank swaps rules to swaps between two non-US parties by removing guaranties of those swaps by a US parent or affiliate (see Legal Update, Is It Safe to "De-guaranty" Cross-border Swaps to Avoid Dodd-Frank?).

Massad pointed out that there are certain dangers that foreign units can pose to the US economy even if they are not explicitly guaranteed by the parent company. The new plan would therefore require even "de-guaranteed" transactions to comply with US rules if the offshore unit's financials are consolidated into the financial statements of the US parent company. This plan would likely affect most large US banks since US accounting rules generally require consolidation of entities in which the parent has a "controlling financial interest."

In his speech, Massad acknowledged that this plan is still being discussed internally as well as with bank regulators. He also mentioned that the CFTC would likely seek public comment before putting this plan into effect.