We are hoping to take up the early group of final rules in the spring. In no particular order, this group may include the entity definitions rule and the associated swap dealer and major swap participant registration requirements. It also may include a final rule on the end-user exception from clearing. These are important rules that many market participants have indicated they hope we consider early.
Second, there are two process rules that we have discussed finalizing early. These relate to the process for mandatory clearing and Part 40 for rule submissions from clearinghouses and exchanges.
Third, we are discussing finalizing the large trader reporting rule early, as it is important for the CFTC to accomplish many of its surveillance and position limits initiatives.
Fourth, we may look to consider some of the rules relating to enforcement, such as the whistleblower rule and the anti-manipulation rule, in the early group.
Fifth, there are some rules that we proposed early in the process and thus may be ready soonest for Commission consideration. These include the fair credit reporting rule, consumer information privacy rules, conflicts of interest, removing references to credit rating agencies and the related revisions of Rule 1.25 and the definition of agricultural commodities.
Beyond the rules that we will possibly consider in the early group, there are four broad clusters of rules, as well as a number of more specific rules, that may be included in the middle group.
The first cluster includes rules relating to clearinghouses, such as risk management, financial resources, participant eligibility, recordkeeping and straight-through processing.
The second cluster includes rules relating to business conduct standards for swap dealers – both internal and external. This includes rules related to sales practices, trading documentation, confirmation, portfolio reconciliation and compression requirements, recordkeeping, conflicts of interest and risk management.
The third cluster of rules relates to data. It includes rules governing swap data repositories (SDRs) and swap data recordkeeping and reporting requirements.
The fourth cluster relates to trading markets. It includes regulations for trading platforms, such as designated contract markets (DCMs), swap execution facilities (SEFs) and foreign boards of trade, as well as real-time reporting and block trading rules.
Beyond the four clusters, there are a number of other rules that might be included in this middle phase. These include agricultural swaps, governance for DCOs, DCMs and SEFs, and segregation for uncleared swaps.
One other important rule relates to position limits. When the CFTC proposed an energy position limits rulemaking last year, we received more than 8,000 public comments. The public comment period for our re-issued position limits proposed rulemaking doesn’t close until March 28, and yet we already have received more than 3,500 public comments. We’ve received comments from interested parties ranging from DCMs registered with the CFTC to commercial end-users to someone purporting to be Charlie Sheen – we did remove that one from the comment file. It’s safe to say there is a lot of interest in this rulemaking.
To put the number of comments in context, we received roughly 170 comments in response to the entity definitions rulemaking, generally around 10-20 on the clearinghouse rules, 15-55 on business conduct standards rules, about 70 on real time reporting and 10-20 on our process rulemakings.
It will take some time to consider, summarize and respond to all of the comments we expect to receive in response to the position limits rulemaking, and it therefore may be included in the middle group.
We are discussing finalizing the middle group in the summer months.