Dodd-Frank Act: CFTC Adopts Final Rules for Swaps Marketplace

Tasked by the Dodd-Frank Act to reform the swaps marketplace, the Commodities Futures Trading Commission recently finalized several key rules regulating the activities of dealers and major swap participants. 

For your reference, here’s a roundup of legal commentary and analysis on the new regulations:

CFTC Holds First Open Meeting of 2012 and Finalizes Key Rulemakings Under the Dodd-Frank Act (Sutherland Asbill & Brennan LLP)

“On January 11, the Commodities Futures Trading Commission (CFTC) adopted three final rules to implement certain requirements contained in Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including (1) the protection of cleared swaps customer collateral, (2) external business conduct standards for swap dealers and major swap participants, and (3) the registration of swap dealers and major swap participants. The CFTC also adopted proposed rules to implement the Volcker Rule.” Read more»

CFTC Adopts Customer Property Segregation and Other Swap Regulations; Proposes Volcker Rule (Dechert LLP)

“These rules address the treatment of collateral posted for cleared swaps, the registration and business conduct requirements applicable to swap dealers and major swap participants, and the CFTC-specific provisions of the ‘Volcker Rule.’ Various aspects of these final and proposed rules will have direct and indirect implications for mutual funds, private funds, separately managed accounts, and other users participating in the commodity markets.” Read more»

CFTC Adopts Final Rules Regarding Protection of Cleared Swaps Collateral (Ropes & Gray LLP)

“The CFTC adopted what is known as the ‘legal segregation with operational commingling’ or ‘LSOC’ model for segregation of cleared swaps customer collateral. Under the LSOC model, both the [futures commission merchants] and the [derivatives clearing organizations] are required to segregate on their respective books and records the cleared swaps collateral relating to each customer.” Read more»

Corporate and Financial Weekly Digest – January 13, 2012 (Katten Muchin Rosenman LLP)

“The … final rules [regarding] business conduct standards rules for swap dealers and major swap participants, regulat[e] their dealings with counterparties and additional requirements when they deal with ‘Special Entities,’ which the final rules define to include: (1) a Federal agency; (2) a State, State agency, city, county, municipality, or other political subdivision of a State, or any instrumentality, department, or a corporation of or established by a State or political subdivision of a State…”  Read more»

CFTC Extends Effective Date for Swap Regulation and Finalizes Certain Swap Data Recordkeeping and Reporting Requirements (Sutherland Asbill & Brennan LLP) 

“[T]he CFTC held an open meeting on December 20 at which it unanimously approved the issuance of two final rules pertaining to: (1) swap data recordkeeping and reporting; and (2) real-time reporting of swap transaction data. Once effective, compliance with the final rules will be phased in by asset class and counterparty type.” Read more»

CFTC Finalizes Swap Data Recordkeeping and Reporting Requirements (Dechert LLP)

“Under the Public Reporting Rules, transaction and pricing data must be reported to the appropriate swap data repository, when registered and operational, for (1) any executed swap that is an arm’s-length transaction between two parties that results in a corresponding change in the market risk position between such parties, and (2) any termination, assignment, novation, exchange, transfer, amendment, conveyance, or extinguishing of rights or obligations of a swap that changes the pricing of such swap.” Read more»

Corporate and Financial Weekly Digest – January 6, 2012 (Katten Muchin Rosenman LLP)

The final rules require electronic reporting to [a swap data repository] of specified swap data at the time of the creation of the swap (swap creation data), as well as over the life of the swap until its final termination or expiration (swap continuation data). Swap creation data includes information regarding all primary economic terms and confirmations for the applicable swap.” Read more»


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