Weeks after releasing its guidance for regulating cross-border derivatives trades, the Commodity Futures Trading Commission is reviewing applications from six jurisdictions that want firms in their territory to qualify for the agency's "substituted compliance" policy. Under substituted compliance, foreign banks and branches of U.S. banks who are involved in cross-border swap trading can follow the regulations in their local jurisdictions if the rules are comparable to the CFTC's own. "U.S. persons" or firms that are domiciled in the United States are not eligible for substituted compliance. The 314-page guidance issued on July 12 explains the CFTC's framework for regulating the $650 trillion over the counter derivatives market. The guidance kicked off a process in which the CFTC considers jurisdictions' applications for substituted-compliance, and negotiations are expected over any differences in interpretation of the rules' comparability. CFTC Chairman Gary Gensler said he expects
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