Order Granting Conditional Substituted Compliance in Connection With Certain Capital and Financial Reporting Requirements Applicable to a Nonbank Swap Dealer Domiciled in the French Republic and Subject to the European Union’s Investment Firms Regulation and Investment Firms Directive
Key claim: The CFTC granted Goldman Sachs Paris conditional substituted compliance, allowing EU IFR/IFD-regulated nonbank swap dealers domiciled in France to satisfy CFTC capital and financial reporting requirements by complying with equivalent EU rules.
Abstract
(Rule · Commodity Futures Trading Commission) The Commodity Futures Trading Commission (“Commission” or “CFTC”) is issuing an order regarding an application submitted by Goldman Sachs Paris Inc. et Cie requesting that the Commission determine that the capital and financial reporting laws and regulations of the European Union applicable to a CFTC-registered swap dealer, which is organized and domiciled in the French Republic and subject to the Investment Firms Regulation (EU) 2019/2033 (“IFR”) and Investment Firms Directive (EU) 2019/2034 (“IFD”) legislative package, provide sufficient bases for an affirmative finding of comparability with respect to the Commission’s swap dealer capital and financial reporting requirements adopted under the Commodity Exchange Act. The order provides that a nonbank swap dealer organized and domiciled in the French Republic and subject to the IFR and IFD legislative package may satisfy the capital requirements and the financial reporting rules under the applicable provisions of the Commodity Exchange Act and Commission regulations by complying with certain specified European Union laws and regulations and conditions set forth in the order.
Why this matters
Substituted compliance orders are the primary mechanism by which the CFTC accommodates global swap dealers without imposing duplicative U.S. capital and reporting rules on top of home-country prudential regimes. Extending this pathway to EU IFR/IFD-regulated nonbank firms domiciled in France opens a template for other EU-domiciled dealers post-Brexit and reduces compliance friction for cross-border derivatives dealing, while conditioning relief on continued equivalence of the EU regime.