Gary Gensler spoke at the FIY Boca Raton conference – among other things about swaps reform (obviously). One thing to note was the following from his speech (bold highlighting mine):

"Thus, as the CFTC completes the cross-border guidance, I believe it’s critical that Dodd-Frank swaps reform applies to transactions entered into by branches of U.S. institutions offshore, between guaranteed affiliates offshore, and for hedge funds that are incorporated offshore but operate in the U.S. Where there are comparable and comprehensive home country rules abroad, we can look to substituted compliance, but the transactions would still be covered.

Otherwise, American jobs and markets may move offshore, but, particularly in times of crisis, risk would come crashing back to our economy.

The Commission granted time-limited relief until this July for non-U.S. swap dealers (and foreign branches of U.S. swap dealers) from certain Dodd-Frank swap requirements.

In July, when the relief expires, various Dodd-Frank requirements will apply to non-U.S. swap dealers. Overseas financial institutions that wish to look to substituted compliance to fulfill Dodd-Frank requirements are encouraged to engage now with the CFTC, as well as their home country regulators."

July is just 3 months away – and no further relief in sight nor (it seems) have regulators from both sides of the Atlantic achieved meaningful advances on the topic of substituted compliance. It puts a number of non-US market participants in a dire situation… Transcript from the speech here.