CFTC releases sixth set of Dodd-Frank rules

The Commodity Futures Trading Commission (CFTC) hosted its sixth open meeting to discuss and release new rule proposals promulgated under the Dodd-Frank Act. Among the five rules released today were the much anticipated definitions for “swap dealer” and reporting requirements.

1. Definition of Swap Dealer and Major Swap Participant (MSP): Together with the Securities and Exchange Commission (SEC), the CFTC released these definitions as well as exemptions for de minimis and exclusion for loan originators. Additionally, the rule gives definitions for “Substantial position,” “Hedging or mitigating commercial risk,” “Substantial counterparty exposure,” “Financial entity” and “Highly leveraged.”

Definition of Swap Dealer and MSP Fact Sheet from CFTC

Definition of Swap Dealer and MSP Q&A Sheet from CFTC

2. Reporting, recordkeeping and daily trading records requirements for swap dealers and major swap participants: This rule explains the data swap dealers and MSPs must keep on record including what pre-execution, execution and post-execution data on each trade must be saved.

Recordkeeping Fact Sheet from CFTC

Recordkeeping Q&A Sheet from CFTC

3. Derivative clearing organization (DCO) definitions, procedures and core principles: The rule proposes definitions for DCO, and adds definitions for various margin requirements.

DCO Definitions and Core Principles Fact Sheet from CFTC

DCO Definitions and Core Principles Q&A Sheet from CFTC

4. Reporting, recordkeeping, public information and information sharing requirements for derivatives clearing organization DCOs: This rule specifies what information is required to be reported on a periodic basis and what is required on an event-specific basis.

DCO Info Management Fact Sheet from CFTC

DCO Info Management Q&A Sheet from CFTC

5. Core principles and other requirements for designated contract markets (DCM): The rule amends and applies 23 core principles, and incorporates the trading and execution of swaps on DCMs.

DCM Core Principles Fact Sheet from CFTC

DCM Core Principles Q&A Sheet from CFTC

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