In a limited initial action, potentially in response to the vocal objections of Commissioner Giancarlo, the CFTC has delayed implementation of swaps margin rules by a month. We hope they will wisely delay them until mid-2017, to harmonize with EU rules and eliminate regulatory arbitrage.
U.S. financial regulators gave over-the-counter (OTC) swap dealers an extra month to comply with new derivatives trading rules set to take effect on Thursday. Regulators in Europe, Singapore, Hong Kong and Australia also recently delayed the implementation of margin rules amid fears their banks were not ready, a move some experts said has created an uneven playing field. India said it was delaying its margin rules on Thursday. The new rules will not be enforced in Europe until mid-2017, after the European Commission announced earlier this year that it would delay implementation. Still, banks from Europe, Singapore, Hong Kong and Australia have stopped trading OTC products with U.S. and Japanese banks, lest they are forced to post collateral to trade with them. "This regulatory arbitrage won't change until we have a level regulatory playing field next summer," Ramakrishnan said.