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CFTC targets swaps loophole

Proposed rule tightens restrictions on overseas units of US banks

CFTC targets swaps loophole

US swaps regulators sought to close a legal loophole that allowed American banks to shift some of their business overseas to avoid tough US rules.

The Commodity Futures Trading Commission on Monday voted 4-0 to propose tighter restrictions on certain swaps booked by overseas branches of US firms, requiring the offshore units adhere to CFTC rules even in cases where the units' American parents aren't explicitly on the hook for the trades.

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