A memo on financial trades from the Commodity Futures Trading Commission prompted blowback from the Republican chairman of the House Financial Services Committee, who on Friday warned the agency missive would bring economic uncertainty to the market.
Officials on the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) said they issued a guidance in response to questions from derivative dealers about the application of new regulations drafted under the Dodd-Frank Wall Street reform law.
The clarification follows a rule placing new restrictions on cross-border derivatives trading and centers on transactions between non-U.S. swap dealers and foreign people that are “arranged, negotiated or executed” in the United States.
Rep. Jeb Hensarling (R-Texas) who leads the financial services panel, blasted the guidance, saying it amounts to a sudden policy change outlawing transactions on Friday morning that had been permissible on Thursday afternoon.
“This is yet another example of out-of-touch Washington bureaucrats making rules in a vacuum and acting with absolutely no regard for the impact their arbitrary and capricious actions have on our economy,” Hensarling wrote in a statement.
Further, he complained that the decision had been made by staff-level “unelected and unaccountable bureaucrats,” rather than the agency’s commissioners.