Comment Text:
The Commodity Futures Trading Commission, a crucial watchdog, has asked for comment on a proposal governing the treatment of derivatives trading by foreign affiliates of U.S. companies. Under this weak proposal, companies could potentially escape oversight by channeling money through regulatory havens just as they escape taxes by channeling money through tax havens. (Indeed, the Cayman Islands was the nominal site of most of the derivatives deals responsible for Long Term Capital Management disaster in the 1990s.) Industry proposals would also allow a company to evade regulation if it could argue that the activities of a subsidiary were “not guaranteed,” creating a field day for lawyers and a huge threat to U.S. taxpayers.
This is not acceptable. Please hold the line on the new derivatives rules.
