CFTC and Australia Agree on Cross-border Swap Dealer Supervision | Practical Law

CFTC and Australia Agree on Cross-border Swap Dealer Supervision | Practical Law

CFTC Commissioner Timothy Massad entered into a Memorandum of Understanding (MOU) for cooperation and information sharing between the CFTC and the Australian Prudential Regulation Authority (APRA), which outlines the respective agencies' cooperative efforts in connection with the supervision of registered swap dealers that are located in either Australia or the US, which are also registered financial institutions under Australian regulations.

CFTC and Australia Agree on Cross-border Swap Dealer Supervision

Practical Law Legal Update 5-608-7626 (Approx. 3 pages)

CFTC and Australia Agree on Cross-border Swap Dealer Supervision

by Practical Law Finance
Published on 16 Apr 2015 • USA (National/Federal)
CFTC Commissioner Timothy Massad entered into a Memorandum of Understanding (MOU) for cooperation and information sharing between the CFTC and the Australian Prudential Regulation Authority (APRA), which outlines the respective agencies' cooperative efforts in connection with the supervision of registered swap dealers that are located in either Australia or the US, which are also registered financial institutions under Australian regulations.
On April 13, 2015, CFTC Commissioner Timothy Massad entered into a Memorandum of Understanding (MOU) with the Australian Prudential Regulation Authority (APRA), which outlines the respective agencies' cooperative efforts in connection with the supervision of registered swap dealers (SDs) or major swap participants that are located in either Australia or the US, which are also registered financial institutions under Australian regulations.
The MOU outlines the CFTC's and the APRA's intent to consult, cooperate and exchange information in connection with the supervision of firms that are located in either Australia or the US and that are registered as both:
  • SDs or MSPs with the CFTC.
  • Financial Institutions with the APRA.
(collectively, referred to as Covered Firms). The MOU covers information sharing for all derivatives activities and all conduct of Covered Firms that is covered by either CFTC or APRA regulations.
The MOU requires cooperation only to the extent domestic law allows, does not create legally binding obligations and does not alter the terms of any existing agreements, but specifically provides for:
  • General information sharing, which would relate to areas of mutual supervisory interest, the failure (or potential failure) of a Covered Firm and areas of common regulatory concern such as the initial registration of Covered Firms, the ongoing supervision of Covered Firms and regulatory actions taken against Covered Firms.
  • Event-triggered notifications, which would occur if regulatory changes might have an impact on the operations of a Covered Firm, if a material event occurs that threatens the financial or operational stability of a Covered Firm or if an enforcement action is taken against any Covered Firm.
  • Request-based information sharing, which would occur upon written request to aid the requesting authority in carrying out its regulatory goals with respect to Covered Firms and include information relevant to the financial condition of the Covered Firm, required regulatory filings of the Covered Firm and regulatory reports prepared by the authority.
  • Consultations, which would include periodic communications between the authorities to discuss areas of common interest.
The MOU also provides for on-site visits by either the CFTC or the APRA to Covered Firms that are located in the other's jurisdiction, restricts the purposes for which the information obtained under the MOU can be used and maintains the non-public nature of shared information, except in certain circumstances.