Alert November 30, 2010

CFTC Proposes Rules Implementing Regulatory Program for Swaps Dealers and Major Swap Participants

In accordance with Title VII of the Dodd-Frank Act, the CFTC issued three releases designed to implement various elements of the Act’s oversight program for swap dealers and major swap participants.

  • Registration – this proposal would establish the process for registering swap dealers and major swap participants. The proposed regulations would require these entities to become members of the National Futures Association and to confirm their associated persons are not subject to a statutory disqualification under the Commodity Exchange Act.  The proposing release also discusses the CFTC’s proposed timetable for implementing the registration, definitional and regulatory elements of the Dodd-Frank Act’s oversight program for swap dealers and major swap participants.
  • Duties – this proposal would establish the duties of swap dealers and major swap participants registered with the CFTC with regard to risk management procedures; monitoring of position limits; supervision; business continuity and disaster recovery; regulatory reporting and related recordkeeping; and antitrust matters.
  • Conflicts of Interest – this proposal would create requirements related to potential conflicts of interest for swap dealers and major swap participants.  Among the topics addressed in the proposed rules are the preparation and release of research reports; the use of informational barriers; and clearing services.

Comments on the proposals are due by January 24, 2011.