ISDA are to publish a “Cross-Border Swaps Representation Letter” in order to facilitate compliance with the CFTC’s final territoriality guidance. The letter, currently in draft form, contains a series of representations which may be checked or not according to one’s status under the guidance. If a party self-identifies as not a US person, the letter invites then to elucidate their status with respect to guarantees by U.S. persons and whether such guarantors are financial entities. Another section enables the party to testify as to their classification as an “affiliate conduit”. The letter’s final section enables U.S. banks to confirm their registration as an SD/MSP and to list which of their foreign branches will be caught by the legislation.
Any tool which can aid market participants to navigate the treacherous waters of the CFTC’s final guidance is to be warmly welcomed. ISDA’s timely first effort in this regard goes some way to simplifying a potentially complex and confusing process.Contact Us